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Top Stocks With Helene Meisler

 Top Stocks

Up-and-Down Action Continues

By Helene Meisler | 03/31/15 - 06:39 PM EDT
Stocks in Focus: FXE, PFE, LAZ, TFM, GILD

The Market

Note: I am taking a few days off to spend the upcoming holidays with my family. My next letter will be Monday. Wishing everyone who celebrates a Happy Passover and Happy Easter!

I cannot decide if the selling -- thus the accelerated selling late in the day -- was due to the end of the quarter or just because the market statistics have been so poor of late. The quarter turned out to be a volatile chopfest, but at least we did finally see active managers outperform the S&P. That was a change I thought might come to fruition when the calendar turned to 2015, and it has. I for one welcome it.

Before we get to the statistics, I want to point out that the S&P finds itself right back at that uptrend line I have been drawing in for the last several weeks. I realize most folks won't use this line, they will use those twin lows around 2040 as their "stop," but I am going to watch this line since it has been a good spot for rallies for the last three weeks. If we fail to rally from the line, it would be a change in the market.

As I sat at my desk watching the final trading of the day, I was struck not just by the up-and-down action of the market over the course of the last few months, but how the follow-through days are getting fewer and farther between. Think of it like this: We had a two-week correction in early December. That was followed by an almost two-week rally. The next decline took place over just one week.

The next rally lasted two days before retreating. That decline was a mere week. Then we had a rally of just over a week and a decline of just over a week. That was January's action. Then came February, where the trend lasted for four weeks to the upside.

Then it was a week of downside, almost two weeks of upside, but now it was three days of downside, one day of upside and so on. The rallies are shorter and the declines are shorter time-wise. It made me go back to the fall of 2008. Let me preface this by saying I do not envision a 2008-type decline in the market. How could we get that with the zero interest rate policy? But let's take a look.

September 2008 was essentially choppy until midmonth, and then Lehman went under and we collapsed. That collapse lasted about four weeks. But now look at mid-October. Up for two days, down for two days. Up for three days. Down for a week. Back up for just over a week. In early November, we finally caught a trend when we slid for three weeks (similar to February this year).

Then it was up for a week, down for a few days, up for two days, down for a few days, etc. Right through year's end. I have not taken this into the year 2009 because I just wanted to show three or four months, similar to what we have now in time.

I grant you, the volatility then was massive compared to now because the daily percentage moves were significantly more extreme. But the roller-coaster effect was quite similar. In January 2009 the market let go again to the downside in order to get us out of that up-and-down. Eventually our market will have to push out of this roller coaster, too. I'd like to think it will be to the downside so that we can flush out weak holders and finally rally well, but I've been waiting since December and it hasn't happened yet.

I don't know about you, but I sure hope we don't get another save.

New Ideas

I was asked to follow up on the chart of CurrencyShares Euro Trust (FXE), an ETF to be long the euro. You might recall I originally thought it could rally to $110, but it stopped at $108 and retreated. I think it is entirely possible that in the next few days the FXE finds another low and rallies again. The key will be if it can rally past $108. If I am correct on a euro rally, then it ought to help the energy stocks that we discussed last evening.

Today's Indicator

The McClellan Summation Index for the NYSE is not up or down; it's flat. Nasdaq's is still heading down and will require a net differential of +1.1 billion shares to get it to stop its decline.

Q&A

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

We looked at Pfizer (PFE) not long ago and there is still an unfulfilled target on the stock around $36- $38. Quite frankly, I'm surprised it hasn't gotten there yet, but I still believe it will. It's just taking its time doing so!

I am tempted to like the chart of Lazard (LAZ) because it would be a big breakout if it could get up and over that resistance line, but part of me wonders why it hasn't yet done so. For now, I am willing to give it a chance, but if it trades back under $51, I would not stick around to see if it wants to rally again. If it can break out, the target would be $60-$63.

They just opened a Fresh Market (TFM) near my house and I have been meaning to get over there to see what the fuss is about. When it comes to the chart, I have not been a fan of this for quite some time; I recall perhaps six or eight months ago my preference was Whole Foods (WFM) over TFM. But TFM has now gone sideways since November. If it can get up and over $42, I'd be impressed and consider it a nice breakout with a target around $48. Right now, I'd use a stop under $39.50-$40.

We have looked at Gilead (GILD) a number of times in the last six or eight months, and mostly I have not been a fan. At one point, I was downright bearish on it, but lately I have thought it would just go sideways. Well, if it breaks this line ($97.50) I'd have to go back to being a bear on it and looking for a downside test of the spike low in the upper $80s. In fact, unless the chart can get back up over $103, that's the way I'd lean.

Regards, Helene Meisler

Finding the Flaws in a Big Day
Stocks in Focus: XLE, LVS, X, CZR, MNST, PSX

Let's see if this rally can stick around.

03/30/15 - 06:28 PM EDT
Friday Makes This Week Really Interesting
Stocks in Focus: XLU, SOHU, P, GIS, PSUN

We have the employment report coming when the stock market is closed.

03/29/15 - 03:26 PM EDT

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