Keep Reading Your Charts
Because the market is
down so much, it’s quite hard to find breakouts. Those breakouts that we do see
are low-level ones. In such a situation, I like to focus on both bounce moves
and breakdowns. There are so many patterns out there, and when you can’t find
your favorite, you have to look at others.
Today’s Watchlist:
(
LVLT |
Quote |
Chart |
News |
PowerRating),
(
PALM |
Quote |
Chart |
News |
PowerRating),
(
KANA |
Quote |
Chart |
News |
PowerRating),
(
ITWO |
Quote |
Chart |
News |
PowerRating)
L-3
(
LVLT |
Quote |
Chart |
News |
PowerRating) tested
support again on Thursday. It has been trading in a range with a bottom just
over support. At last look, L-3 had moved below this key level. Watch for a
closing move below support. Should it breakdown, it may simply retest the
late-May lows. If you’re looking for a potential short, consider waiting for L-3
to take out the May lows, as this level is not far off from support.
Palm
(
PALM |
Quote |
Chart |
News |
PowerRating), the famous 3-com
(
COMS |
Quote |
Chart |
News |
PowerRating) spin off, has
been trending higher since late May. It’s been somewhat of a bumpy ride, but
the stock has appreciated more than 16 points in value. With this type of setup,
we’ll watch for two different plays. First, it’s possible to play the bounces
off of the support and resistance levels. The other method is to wait for a move
outside of the trading range to signal the end of a trend, and the beginning of
a breakout or breakdown.
Kana Communications
(
KANA |
Quote |
Chart |
News |
PowerRating) broke through its support level
on Thursday morning, but quickly rebounded with the rest of the techs. Let’s
watch for a breakdown below the support level that I’ve highlighted below. If we
see this type of move, watch for another possible support around near the April
lows. If this level breaks, it may provide a good shorting opportunity.
iTwo Technologies
(
ITWO |
Quote |
Chart |
News |
PowerRating) bounced off a trendline created
during the last two significant pullbacks. Despite the gap lower on Thursday,
ITWO still held support. The next question is will there be trouble getting
back over the 50-day MA? Should it successfully go back over the 50-day MA,
watch for a potential opportunity. The last three times that it bounced, the
stock made significant gains. Perhaps this type of price action is just part of
a large channel that ITWO is traveling through.
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Until later,Â
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