Leading Stock Reversals

This week the volume in the market has been very light as it is a holiday shortened trading week and the start of the Rosh Hashana holiday. Therefore, it is important to not make a big deal out of any small move higher or lower in the indexes. However, many stock market leading stocks have reversed today after a strong gap higher and this must be respected.

The first market leader that reversed after making a new 52 week high was Citrix Systems Inc(NASDAQ:CTSX). This stock has surged higher since early July when it was trading as low as $43.00 a share. Today the stock traded as high as $63.83 at the open. The stock still looks fine on the charts and today’s small reversal day may not mean all that much. However, this stock will have strong resistance at the $65.00 level and very strong resistance at the $69.50 area. However, when a stock makes a new 52 week high and reverses it is always worth noting.

Simon Property Group Inc.(NYSE:SPG) is another leading stock that traded higher at the open only to stage a sharp reversal today. At 2:45 pm EST the stock has made a sharp outside day on the charts. Now lets remember that the volume is very light today, therefore, there may not be a lot of conviction behind the decline. However, this is a market leading stock and the king of the commercial property sector, therefore, it is also worth noting.

F5 Networks Inc.(NASDAQ:FFIV) is a leading technology stock in the networking sector that made a new 52 week high this morning. This stock could still be poised to reached the psychological $100.00 level, however, it has reversed from it’s gap high open today to actually trade negative on the trading session. Again, this is a very light volume trading session and this reversal may mean very little, however, leading stocks must be watched very closely.

Tomorrow should be another very light trading day. As many of you may already know the light volume usually favors the upside. Therefore, when leading stocks decline all traders and investors should take note as this is often a sign of institutional distribution. Please understand when an institution sells stock they feed it out into the market and don’t just sell their entire accumulated position all at once causing a panic or fear in the market. These stock should be watched very closely over the next few weeks.

Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com

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