Jim Van Meerten's  Instablog

In a choppy market there are always opportunities others miss because they don't bother to learn how to use a stock screener. This morning I used Barchart to screen the Small Cap S&P 600 Index to find some gems and found West Pharmaceutical Services (WST)Medidata Solutions (MDSO) and Cymer (CYMI)

West Pharmaceutical Services (WST)

Barchart technical indicators:

• 96% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 10 new highs and up 8.52% in the last month
• Relative Strength Index 60.50%
• Barchart computes a technical support level at 44.69
• Recently traded at 45.64 with a 50 day moving average of 42.96

Medidata Solutions (MDSO)

Barchart technical indicators:

• 96% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 4 new highs and up 13.72% in the last month
• Relative Strength Index 59.88%
• Barchart computes a technical support level at 27.79
• Recently traded at 28.50 with a 50 day moving averages of 26.53

Cymer (CYMI)

Barchart technical indicators:

• 96% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 9 new highs and up 7.07% in the last month
• Relative Strength Index 58.42%
• Barchart computes a technical support level at 50.94
• Recently traded at 52.06 with a 50 day moving average of 49.55

Overnight Developments

• E-mini S&Ps this morning are down 8.75 points (-0.67%), undercut by the 1.55% drop in European stocks. Commodity prices are mostly lower this morning with gold down 1.1%, copper down 1.6%, crude oil down 1%, and agricultural commodities mostly lower. The markets are worried that tensions may be building between France and Germany over French President Hollande's call for growth measures and joint euro bonds. The markets are also worried about weaker global growth with today's report that Japan's April exports showed an increase of only +7.9% y/y versus expectations of +11.8% y/y. The markets shook off comments by the Chinese government about new growth measures.
• Asian stock markets fell across the board today: Japan -1.98%, Hong Kong -1.33%, China -0.41%, Taiwan -1.75%, Australia -1.31%, Singapore -1.53%, South Korea -1.20%, India -0.49%, Turkey -1.89%.
• ECB council member Andres Lipstok today said that the ECB is not planning more stimulus at the moment despite the increased concern about Greece leaving the Eurozone. He said "we didn't discuss cutting rates below 1% in our meetings." His comments were in line with recent comments by other Eurozone members but nevertheless reiterated the ECB's message that the ECB at present does not plan to ride to the rescue of the politicians once again.
• The markets are awaiting news on today's negotiating session in Baghdad between Iran and the P5+1 negotiators (i.e., the five permanent UN Security Council members plus Germany). Any reports of progress are likely to cause fresh weakness in crude oil prices since the chances of a military attack on Iran would become further delayed.
• In a display of safe-haven demand for German securities, Germany today sold 4.56 billion euros of 2-year securities with a yield of 0.07%. The security carried a zero-percent coupon for the first time.
• The minutes from the May 9-10 Bank of England Monetary Policy Committee meeting showed that the vote was 8-1 in favor of the decision to halt its quantitative easing program by holding steady its bond-purchase target at 325 billion pounds. That was supportive news for the British pound. However, the minutes also noted that the target could be raised again as conditions change.
• The Eurozone March current account balance (seasonally adjusted) rose to a surplus of 9.1 billion euros from a revised 1.2 billion euro deficit in February, which was mildly supportive for the euro.
• UK April retail sales ex-auto fuel fell by -1.0% m/m and -0.3% y/y, which was weaker than the consensus of -0.7% m/m and +0.7% y/y. The report was bearish for the British pound.
• The markets are waiting today's informal EU Summit where the markets will be watching to see how much pressure French President Hollande applies to Germany for his goals of growth measures and joint euro bonds.
• The Chinese government today made another statement in favor of stepped-up growth measures. The government posted a summary of its cabinet meeting and said, "We must proactively take policies and measures to expand demand and to create a favorable policy environment for stable and relatively fast economic growth." Separately the Chinese government said today that China will start a series of "key infrastructure projects that are vital to the overall economy and can facilitate growth" and speed up construction of existing railway, environmental protection and rural projects."
• The Bank of Japan after its 2-day meeting announced that it left its monetary policy unchanged, which was in line with market expectations. The BOJ outcome was supportive for the yen.

Overnight U.S. Stock News

• June E-mini S&Ps this morning are trading are down -8.75 points (-0.67%), undercut by the sharp 1.6% sell-off in European stocks, concern about whether French-German conflict will break out at today's EU informal summit, and today's weaker-than-expected Japanese exports report. There are earnings reports today from HPQ-Hewlett Packard (consensus $0.91), NTAP-Netapp (0.63), HRL-Hormel (0.41), PVH-PVH Corp (1.26), TOL-Toll Brothers (0.03).
• U.S. stocks on Tuesday closed narrowly mixed after fading late in the session: S&P 500 +0.05%, Dow Jones -0.01%, Nasdaq 100 -0.24%. The stock market on Tuesday started out with some carry-over optimism from Monday's session where the theme was the improved prospects for growth measures in Europe and China. Stocks on Tuesday also received an early boost from the favorable U.S. new home sales report of +3.4% and the report of an IAEA-Iran agreement on nuclear inspections. However, the bearish factors stacked up during the day to push the market lower. Bearish factors included (1) Fitch's downgrade of Japan's credit rating to A+ and the reminder that Japan could yet face a debt crisis considering that its total debt is more than twice the size of its GDP, (2) the OECD's various warnings about the world economy in its semi-annual outlook report, and (3) some nervousness ahead of today's informal EU summit where France and Germany seem destined to butt heads on issues including joint euro bonds and so-called growth measures.

Today's Market Focus

• June 10-year T-notes this morning are up 12 ticks on the lower trade in global stocks and the increased concern about the European debt crisis. The Treasury today sells $35 billion in 5-year T-notes. T-note prices on Tuesday closed higher: TYM2 +4, FVM2 +0.75. T-notes on Tuesday received a boost late in the session when the stock market fell fairly sharply and lost the day's gains. Earlier, T-notes saw some downward pressure from the U.S. new home sales report of +3.4% and supply overhang in the midst of this week's $99 billion T-note auction package.
• The dollar index this morning is up 0.21 (+0.26) on increased safe-haven demand with the sharply lower trade in European and Asian stocks. EUR/USD is down 0.0028 (-0.22%). USD/JPY is down -0.60 (-0.75%) with the yen seeing support from the BOJ's unchanged policy today and its decision not to raise its asset purchase target. The dollar index on Tuesday closed moderately higher after edging to a new 4-month high: Dollar Index +0.41, EUR/USD -0.0134, USD/JPY +0.65. The dollar index was boosted by concern ahead of today's EU informal summit and by Tuesday's downgrade of Japan's credit rating, which put a dent in the yen. French and German officials have been trying to put a good face on their early meetings, but things may get a bit more tense today as French President Hollande puts more pressure than the markets had expected on Germany about joint euro bonds and the adoption of growth measures. French President Hollande has said France will not ratify Chancellor Merkel's prized fiscal pact until it gets the growth measures it wants.
• July WTI crude oil prices this morning are down -0.87 (-0.95%) and July gasoline is down 0.0209 (-0.73%). Bearish factors this morning include lower global stocks, expectations for an oil-bearish DOE report today, and indications that today's Iran negotiating session will at least produce another round of talks if not any breakthroughs. Crude oil and gasoline prices on Tuesday closed lower: CLN12 -1.01 (-1.09%), RBN2 -0.0054 (-0.19%). Crude oil prices were pressured by the lackluster Chinese leading economic indicator, the Japanese credit rating downgrade, the report of an IAEA-Iran agreement on nuclear inspections, and expectations for today's DOE report to show a fresh 21-3/4 year high in U.S. crude oil inventories. The International Atomic Energy Agency said on Tuesday that Iran had verbally agreed to conclude and sign an agreement "quite soon" allowing broader IAEA inspections, including the inspection of the Parchin military complex where Iran is suspected to have tested a nuclear weapons trigger. Israel dismissed yesterday's agreement to sign an agreement as a stalling tactic ahead of today's second round of negotiations between Iran and the P5+1 (the five permanent UN Security Council members plus Germany).
• The market consensus for today's weekly DOE report is for a further 1.5 million barrel rise in crude oil inventories to another new 21-3/4 year high. Today's report is for the week ended May 18, which is prior to the reversal of the Seaway pipeline on May 19. The reversal in the Seaway pipeline should result in a slow drawn-down in oil inventories at the Cushing hub, which reached another new record high of 45.1 million barrels last week. However, the Seaway reversal won't necessarily have an impact on overall U.S. inventories since the oil will simply be flowing from Cushing to the Gulf coast and be stored in facilities at the Gulf, thus have little net impact on overall U.S. crude oil inventories. The DOE report is expected to show a 500,000 increase in gasoline inventories and a 500,000 barrel decline in distillate inventories. The consensus is for the refinery utilization rate to rise 0.4 points to 88.7%, adding to last week's sharp 1.9 point rise to 88.3%. Inventories are running 2.0 points above the 5-year seasonal average of 86.3%.

Today's U.S. Earnings Reports

Earnings reports (sorted by mkt cap): HPQ-Hewlett Packard (consensus $0.91), NTAP-Netapp (0.63), HRL-Hormel (0.41), PVH-PVH Corp (1.26), TOL-Toll Brothers (0.03).

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Barchart.coms Chart of the Day - Pilgrims Pride (PPC)

Barchart Research Team - BC - Tue May 22, 5:50PM CDT

Related Stocks
PPC - Pilgrim's Pride Corp.

The "Chart of the Day" is Pilgrim's Pride (PPC), which showed up on Tuesday's Barchart "52-week High" list. Pilgrim's Pride on Tuesday posted a new 14-month high of $8.15 and closed up +5.91%. TrendSpotter has been long since May 16 at $7.70. In recent news on the stock, Pilgrim's Pride on April 27 reported Q1 EPS of 18 cents, which was much better than the consensus of 8 cents. Pilgrim's Pride, with a market cap of $1.5 billion, is one of the largest chicken companies in the US, Mexico and Puerto Rico.

(click to enlarge)

How we found the Chart of the Day:

We found the "Chart of the Day" by scanning the Barchart "52-week Highs" page. That page shows all the stocks that have posted new 52-week highs, which is a popular sign of strong upside momentum.

The status of Barchart's Opinion trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 10 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com web site when you read this report.

• TrendSpotter: Buy
• Short-Term Indicators: 100% Buy
• Medium-Term Indicators: 100% Buy
• Long-Term Indicators: 100% Buy
• Overall Average 100% Buy

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