Reversal or ReverSell?
The Nasdaq futures have managed to rally back above 3000. This seems to be
holding up reasonably well, so far.
Many of the big-name stocks have started to show reversal
patterns. For example, Sun Microsystems
(
SUNW |
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PowerRating) sold off on high volume and
then bounced off its lows to trade back to the green side. Tuesday’s gap higher
is bullish.
Intraday, the semiconductor index just broke through the morning
highs, which also bodes well for Tuesday. But, we will still continue to watch
the 300 level on both the Nasdaq futures and the Nasdaq 100 Index, the NDX. Both
of these area may be resistance.
Otherwise, I am adding two stocks to my watchlist.
First, McDATA
(
MCDT |
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PowerRating) is trying to rebound for a second day
on Tuesday. Yet, it has hit a resistance level that formed on a break of
support. If it is unable to go through this level, it may trade back down and
retest its lows. A break of these lows may offer a short opportunity. Watch this
name for a failed move and set your alerts near the lows from Monday.
The second addition is KLA-Tencor
(
KLAC |
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PowerRating). Although it may
have put in a double bottom, we will not know that for several weeks. Thus, for
the moment, it is worth watching for a reversal. Set your alerts near Monday’s
intraday lows, and near the OCtober low, and watch for a short opportunity based
on a breakdown.
Until later,