JNJ LEADS DRUGS HIGHER -- CONSUMER STAPLE LEADERS -- ADM BREAKS OUT -- AIRLINES FALL -- AMAZON BREAKS SUPPORT -- INTEL TESTING BOTTOM OF TRADING RANGE

JNJ LEADING DRUGS HIGHER... Yesterday we showed Pfizer achieveing a bullish breakout and helping to lead the drug group higher. It was pointed out that PFE was the most heavily-weighted stock in the DRG Index. The second biggest DRG stock is Johnson & Johnson. Chart 1 shows that drug leader having exceeded its November high. That puts JNJ at the highest level in seven months. It's RS line is starting to move up a bit.

Chart 1

CONSUMER STAPLE LEADERS... Some stocks in the consumer staples group gained ground on impressive volume today. Avon Products climbed back over its 200-day line on the heaviest volume in two months. Hershey Foods climbed over its 50-day line. Upside volume has been strong all week. Kroger is close to breaking through overhead resistance near 19.

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ARCHER DANIELS MIDLAND BREAKS OUT... One of the more impressive looking charts in the consumer staples group belongs to Archer Daniels Midland. Its monthly chart shows the stock having broken through its late 2001 peak to reach the highest level in five years.

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AIRLINES BREAK SUPPORT... Yesterday we talked about the relative weakness in airlines stocks owing to higher fuel prices. Several airlines suffered serious technical damage today. Continental and Northwest Airlines broke their fourth quarter lows and their 200-day moving avergages. And they did it on rising volume. Delta fell to the lowest level since last spring.

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AMAZON FALLS... Over on the Nasdaq, one of the day's worst performers was Amazon.com. The chart shows the sorry picture. The stock undercut its fourth quarter lows on rising volume. It's now threatening to fall under its 200-day moving average.

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INTEL TESTING IMPORTANT SUPPORT... We're watching Intel very closely. That's because it's considered a bellwether for the chip sector which has been under pressure of late. The daily chart shows that Intel is now testing the lower end of a trading range that started in early November. After "double topping" over 34, it's now testing its December low near 30. Any chart watcher knows that this is a critical juncture for the stock. In order to keep its trading range intact, and prevent a chart breakdown, it's important that the stock hold in this area. Whether it does or not will have a bearing on the SOX Index and the Nasdaq market.

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