Sunday, May 21, 2006

Weekly Review (5/15/06 – 5/19/06)

Which direction?

The behaviors of the market in this week shocked me. It did not have a technical bounce on Wednesday and Thursday; but had a big drop on the two days instead. The Dow lost 2.08 percent, the S&P 500 slid 1.87 percent and the NASDAQ declined 2.22 percent during this week.

The chart of NASDAQ is horrible now. Many technical support lines were easily broken during the past two weeks. Where is its next support point? The down trend is clear now. Even at a perfect down trend, we should see some bounce, but so far, we have not seen any yet.

Because the down was so sharp, I have reasons to believe that the movement should get flatter. I hope the 11000 of Dow can be a good support line.

Many people will watch the news for some hits to decide whether sell more or buy back. But there isn’t any “big news” on next week’s calendar. Maybe any news can trigger some action of sell or buy. It will make the next week unpredictable. If I want to bet on next week’s market, I would choose flat or up, but not continuously going down.

A lot of stocks are at the bargain price now. Please review my suggestion list. There are some at attractive price. The China related stocks are relative strong recently. You should take a look also.

The followings might worth to watch:

1. ELN
Without any news but speculation (or some nonpublic reasons), it has jumped about 3 dollars (or 20%) in the past few days. It seems having resistant at $18 now. You should pay some attention on it.

Northwest Airline reached some agreements with its pilots and ground works. I don’t know how far it can solve all its problems, but it seems moving forward to get out of bankruptcy. Its current price, $0.50, is very attractive.

Its price is $21.32 now. Its earning is strong and it is going to buy back some shares. I am very optimistic about this stock.

NASDAQ has upped its stake in London Stock Exchange (LSE) yet again, this time to 25.1%. By market value, the holding of over 20% of LSE increased the value of NASDAQ itself. The high trading volume since this year will help NASDAQ’s earning also. Its current price is $33.05. It is a good short/middle term buy target.


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