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Markets Dragged Lower With Key Stock Setups



March 05, 2012 – Comments (0) | RELATED TICKERS: AAPL , IBM , CAT

The markets are seeing some selling on worries stemming from China and Europe. China lowered its growth rate to 7.5%. This is bearish for the entire globe as most advanced economies rely on China. In addition, European issues have started to bubble up again. Things with Greece are getting messy and Spain has said they will not meet the spending cuts required by the bailout of 2011. These raise new concerns of a European defaults.

Apple Inc. (NASDAQ:AAPL) is also selling sharply today. The stock makes up approximately 20% of the NASDAQ 100 and a large portion of the S&P 500. In recent months, Apple has surged higher. This has lifted the markets. However, with a drop in Apple today, the markets are under pressure. Generally, it is not wise to have one stock with such a large weighting on indexes.

Key Stock Moves

International Business Machines Corp. (NYSE:IBM) surged through $200.00 early in the trading day, hitting a high of $201.19. This was a new all time high. While the stock is still positive on the day, it has pulled back under the $200.00 even number. Currently, there is a topping tail on the daily chart that needs to be watched. It could mark a short term top.

Just over a week ago, Caterpillar Inc. (NYSE:CAT) was given as a swing trade short at $116.05. The charts showed a fall on the horizon. Sure enough, CAT hit its first target of $109.55 today. The reason for the fall is multi leveled. First, the stock was extremely extended and into a master level. In addition, there was a topping tail on the daily chart which was never negated. Lastly, the news from China was bearish for CAT's business. All of these combined for great profit.

First Solar, Inc. (NASDAQ:FSLR) is trading at $28.04, -1.98 (-6.60%). This is a new 52 week low for the stock. While most traders thought a major support would have been hit at the double bottom, it has been clear for days that First Solar is headed for $24.50. This is the next major bounce area for the leading solar player.

Gareth Soloway

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