Watch for a Retest of the Lows

 | Oct 22, 2012 | 10:37 AM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

aapl

,

nte

We have a routine Monday-morning bounce to start the week. The flippers hit it hard but support held and inched back up. A bounce in Apple (AAPL) is helping the cause. Breadth is slightly positive at 2650 to 2300 and coal, steel, gold and chips are leading while biotech and retail lag.

What we have to watch for is a retest of the lows. If the early lows are breached, that is going to trigger another round of sell stops and bring in aggressive shorters. When the market is in a downtrend, the lower lows spark the pressure, so keep a close watch on that level. Right now, it's 1429 on the S&P 500.

I'm not very trusting of the upside and any buys I make are with very short time frames. The coals and metals are mostly leading, but I don't see much momentum I want to embrace.

One setup I find appealing is Chinese contract manufacturer Nam Tai Electronics (NTE), which I've discussed before. It has been holding between $10 and $11 since the beginning of September and should attract some momentum buyers if it can break the $11 resistance level with decent volume. Other than that, I have very little on my radar screens and I will stay selective.

At the time of publication, Rev Shark was long AAPL and NTE, although positions may change at any time. 

Columnist Conversations

The new Fed Chief said this at a recent meeting of the Economic Club of NY ... "We have indeed had a disappoin...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.