It's NASD, Not NHRA

Make sure to register for the upcoming course "The Baker/Ten Electronic Trading Course", starting July 7. Click here to go to the registration page.

My latest trading lesson, Finding Intraday Trendlines for Daytrading Part I, is also available now.

My Setup

Several readers have asked me what technical indicators I keep on my charts. The setup that I use to trade is a broadband connection and four 19" monitors, one of which contains several lists of stocks that I'm watching as well as a list of all of the major indices, including the individual groups and subgroups. On another monitor I keep a large five-minute candlestick chart of the position that I'm currently in (or watching closely), with the following indicators: 5-, 10-, 20-, 50-period MAs, MACD, Volume (my favorite), Stochastics, and ADX (Directional Movement). On the third monitor I keep five-minute charts of both the S&P and Nasdaq Mini Futures, and a daily chart of the stock I'm watching with the 10-, 20-, 50-, 200-day MAs, and volume. On the fourth monitor I keep six to nine daily and five-minute charts of the other stocks that I'm watching. I use daily charts for those issues with intermediate-term setups which may provide daytrading and short-term opportunities.

Today's Updates: (CNXT | Quote | Chart | News | PowerRating)

Conexant (CNXT | Quote | Chart | News | PowerRating) was added to the Watchlist as one to watch for a short opportunity, but a big brokerage came to the rescue by adding a price target of 100. Despite this booster shot, Conexant was unable to move above its 50-day MA.

Today's Watchlist: (DNA | Quote | Chart | News | PowerRating), (MFNX | Quote | Chart | News | PowerRating), (ATML | Quote | Chart | News | PowerRating),

Genentech (DNA | Quote | Chart | News | PowerRating) is testing a low-level resistance point again, following its breakout with no continuation. Look for it to trade near the breakout level for a bit while it sets up for a possible breakout. Should it show a continuation, it may move up to the next resistance level, just under 160. Look for the 200-day MA and 50-day MA to provide some support, in the case of a retracement. The biotechs have been getting some new attention in the news, so keep an eye on the entire group (BBH | Quote | Chart | News | PowerRating).

Metromedia Fiber Network (MFNX | Quote | Chart | News | PowerRating) is showing a bullish flag on the right side of its low-level cup formation. While it may spend a while forming its handle, it may also quickly move higher and take out the high of the flagpole. Should it continue lower, look for a bounce off the 50-day MA. We'll check back again if it forms more of a cup-with-handle formation. Set your alerts above the high of the pole as we look for a short-term move. 

Atmel (ATML | Quote | Chart | News | PowerRating) is back at a key level, consolidating. Set your alerts above the high of the last seven days. Ideally the stock will now hold above the 50-day MA and the support from its low-level three-week cup-with-handle formation. Look for a move up toward 50 on a breakout. We may see a pause there because of psychological reasons (like the pause we usually see at 100). Traders with a longer perspective will want to wait for Atmel to take out its all-time high.

Ready for the weekend,

Dave Baker

Waiting in the Wings: Vitesse (VTSS | Quote | Chart | News | PowerRating) - short-term opportunity on pause?

Check back tomorrow morning at 9:15 AM ET for Trading the Open.