Round Two

• October 8, 2001
• Greg Che

Ding…Round Two

Today’s Momentum Trader is written by Vincent Mao.

Despite a higher close on Friday, stocks headed lower this Columbus Day after the
second round of attacks on Afghanistan.  Earnings season is
also upon us and traders are expecting one of the worst earnings periods
ever.  However because of the pessimistic views that are already in place,
any  positive suprises could spark a rally. 

The strongest sector for the day was the semiconductors.  The
semiconductor index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) is continuing to show strength as it tacked
on another 20 points or just over 5%.  Strong names to keep an eye on are:

Micron Technology
(
MU |
Quote |
Chart |
News |
PowerRating) is pulling back from lows and is breaking above its
upper channel line.  

 

Altera
(
ALTR |
Quote |
Chart |
News |
PowerRating) is also pulling back from lows and breaking its upper
channel line.  In addition, Altera has also cracked its 20 day moving
average.

 

Rambus
(
RMBS |
Quote |
Chart |
News |
PowerRating) is forming an ascending triangle.

 

Defense related issues were strong once again.  Viisage Technology
(
VISG |
Quote |
Chart |
News |
PowerRating),
the maker of digital identifications systems had a spectacular day as the stock
gained $4.69 to close at 13.10.  The stock has more than double since last
Thursday. 

 

On the other hand, Engineered Support Systems
(
EASI |
Quote |
Chart |
News |
PowerRating), the maker of
military support systems has formed a bearish key reversal bar.