Weekly Market Report

July 24, 2011

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Weekly Market Report for July 24th, 2011 – July 30th, 2011

Courtesy of Nick Santiago of In The Money Stocks

At this time, many investors are focused on the problems in the European Union, and the U.S. political debate over the debt ceiling being raised. As a trader, the focus should simply be on the charts and the patterns that stocks and commodities are making. In the last report which was posted on July 10th, 2011, the focus was on the Dow Jones Transports. The charts at that time told us that transportation index was extended and due for a pullback – and that is exactly what happened. Readers can easily go back to that last report and see how those charts played out in the iShares Dow Jones Transportation ETF (NYSE:IYT), FedEx Corp. (NYSE:FDX), and Union Pacific Corp. (NYSE:UNP). Learn to read the charts properly and profit.

This week, the extended stocks are coming out of two different sectors. The first sector that is extended is the oil services stocks. Therefore, we shall examine the Oil Services Holders Trust (NYSE:OIH). The second group of stocks that appear extended at this time come from large capitalization technology stocks such as Google Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and International Business Machines (NYSE:IBM). Lets find levels when each of these stocks will have good daily chart resistance and present the best trading opportunities.

The Oil Services Holders Trust (NYSE:OIH) is a basket of the leading oil services stocks. The OIH gained $7.87 last week, closing at $161.53 a share. Price has surged higher by $22.37 a share since its June 27, 2011 pivot low when the stock traded at $139.16 a share. The recent surge higher in the OIH indicates strength by trading above 20, 50, and 200 moving averages. The only problem with the OIH is that price is now extended and overbought on the daily chart. These types of patterns will usually need to pullback or consolidate before moving higher. The next important resistance levels for the OIH will be around the $163.25 area. Should the OIH continue to climb higher the $169.00 level would be the next important weekly resistance level. It is possible to see pullbacks from these resistance areas. Should the OIH pullback traders can watch for short term support around the $156.25, and $153.25 levels.

Apple Inc. (NASDAQ:AAPL) is the leading technology stock in the world at this time. This company designs, manufactures, and markets personal computers, mobile communication media devices, and portable digital music players. As well as sells related software, services, peripherals, networking solutions, and applications around the world. In other words, this stock is the technology market. Recently, Apple stock has surged higher by 85.0 points since June 20, 2011 when the stock traded as low as $310.50 a share. Traders must now realize that the stock is overbought and extended at this time. This does not mean that the stock cannot trade higher, it simply means that it will need to pullback or consolidate very soon. Traders should watch for near term resistance around the $405.00 level. It is possible that the stock could begin to pullback before reaching that resistance area. Should Apple stock pullback, there should be short term support around the $375.00, and $363.00 levels.

Google Inc. (NASDAQ:GOOG) is another leading technology stock that has exploded higher since June 27, 2011 when the stock traded as low as $473.00 a share. Last week, the stock closed at $618.23 share, that is an increase of $145.00 in just four weeks. What a move! The stock is now short term overbought and extended on the daily chart. This is when the stock needs to pullback or consolidate before moving higher. The next important resistance area for Google stock will be around the $623.00, and $637.00 levels. The stock will also come into a very important double top resistance level at $643.00 from its January 2011 high. Google stock will have short term daily chart support around the $598.00, and $585.00 levels.