EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Tuesday: AA Wednesday: BBBY, STZ MARKET NOTE: The action continues to look quite bearish. The bounce today is nice, but is being led once again by the defensive utilities sector - not a good sign. Also, we have negative divergences on the weekly charts that are likely to be resolved sooner rather than later. All in all, I'd be very careful not to become overly bullish on any short-term bounce. The declining 20 hour EMAs on the hourly charts will be the first significant test for the bulls during any rally attempt. ADDITIONS TO WATCH LISTS: There are no additions to our Watch Lists today. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: SJM - Benefiting recently by being a part of the defensive consumer staples sector. It remains in an overall bearish pattern until it can clear 100.00 closing resistance with volume. Large Cap Watch List: CAT - Great performer. Threatening to close at yet another high today. COO - Nice recovery on Monday, finishing above both price support at 130.00 and its 50 day SMA, currently at 129.92. FFIV - Has held up better than most momentum tech stocks and volume trends here remain bullish. MCO - Treading water near 77.50-78.00 price support. Still fine technically. ROC - Stopped out and REMOVED FROM OUR WATCH LIST after its failure to Monday to close above 72.75. TEL - Holding recent price support near 59.00. The rising 50 day SMA should also offer support to the bulls. UA - Short-term volume trends clearly holding this one back and may make the move back down to our Final Entry at 96.70 inevitable. I like the stock for accumulation as I suspect we'll see a pre-earnings run up. VIPS - Rallying very strongly today after holding onto closing support at Monday's close. Great action here thus far, but WOW is this one volatile! Mid Cap Watch List: ATK - Very light volume accompanying today's selling. I'd look for a rally off the 50 day SMA test. KFY - Trying to hold onto 20 day EMA support, although with that long-term negative divergence in play, it may not hold for long. I like the stock, but I like it best on a 50 day SMA test to unwind that daily MACD closer to centerline support. YY - Closed beneath our Closing Stop on Monday so it's been REMOVED FROM OUR WATCH LIST. If you've held or are considering entering this highly volatile stock, I do like the action today - very heavy volume and back above our original closing stop of 68.00. A close above 72-73 would be much more bullish in the days ahead. Small Cap Watch List: PLOW - Performing very well considering how badly small caps have been hit during the recent selloff. It suggests to me there's a lot of underlying strength. A close over 17.60 would be short-term bullish and likely lead to a test of 18.60 price resistance. DELETIONS FROM OUR WATCH LISTS: There are no additional deletions today unless Closing Stops are violated. ROC and YY were both deleted from our Watch Lists on Monday due to closing stop violations. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com