Trendlines
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
Heads up, after the close the Government ruled that Microsoft is a monopoly in PC operating systems. The stock was down over 3 points in early after hours trading. Because Globex S&P futures are closed, it’s impossible to gauge the possible overall market’s reaction. You might want to watch the futures when they re-open on Sunday night for clues. BTW, as you know, Microsoft is now in the Dow so we might see some pressure here.
As you’ve heard me mention before, I often like to draw a trendline from new highs in stocks that are pulling back and look for a breakout above that trendline. With that said, 4 Kids Entertainment [KIDE>KIDE], mentioned last night (see archive) broke out above that trendline (a) today. Continue to look for a buying opportunity here but use caution as this one is extremely volatile.
VoiceStream Wireless [VSTR>VSTR], on the Pullbacks List, closed well and appears to be attempting to resume its uptrend.
I2 Technologies [ITWO>ITWO], mentioned last night, still looks interesting to me. Just wait for it to prove itself by taking out the prior 1-2 bar highs.
For you breakout players, several stocks look interesting to me to tonight. InfoSpace [INSP>INSP], on the Internet Fab 5 List, broke to new highs on an expansion of range out of a big picture cup formation today. Sapient [SAPE>SAPE], on the Momentum 10 Technology List, is forming a high level flag like pattern and looks poised to take out its old highs. And finally, Netbank [NTBK>NTBK], on the New 60-day Highs on Double Volume List, appears to be breaking out of a lengthy low level base.
Best of luck with your trading on Monday!
Dave Landry
PS – Reminder: Protective stops on every trade!