NASDAQ BREAKS 50-DAY AVERAGE -- INTEL BREAKS SUPPORT -- OIL AND TOBACCO STOCKS GAIN
INTEL FALLS BELOW 30 -- NASDAQ TESTING 2000... Given its large size, today's breakdown in Intel is a big blow to the Nasdaq market. Chart 1 shows Intel falling under its December low near 30. That appears to have completed a "double top" formation that started back in November. That's taking a negative toll on the Semiconductor (SOX) Index which is down sharply as well. Chart 2 shows the Nasdaq Composite falling under its 50-day line. That's not good either. The Nasdaq is nearing a test of its December high near 2000. If that doesn't hold, the next support level will be the December low at 1887. While technology is again the day's weakest sector, the two strongest are again consumer staples and energy.
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RJR AND MO HIT NEW 52-WEEK HIGHS... Within a relatively strong consumer staple sector, the two tobacco stocks are both hitting new 52-week highs as shown on their daily chart. The monthly chart of Altria Group is especially strong. Chart 5 shows the stock moving through its 1998 and 2002 peaks to reach an all-time high. Other staple stocks that are rising today are Archer Daniels Midland, Kimberly Clark, and Walgreen. KMB is trading at a new 52-week high.
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OIL STOCKS STILL RISING... The bigger oil stocks are at or close to new 52-week highs today. Three of the strongest are shown below. All three oil leaders are breaking long-term resistance points. Chevron Texaco and Exxon Mobil are breaking long-term resistance lines. ConocoPhillips has broken through its 2000 peak to reach a new record. Today's action shows that money coming out of technology is continuing to rotate into consumer staples and energy.
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