Breakout Backfires
Each day I’m seeing numerous breakouts that I’m adding to my
nightly watchlist. The problem is that I haven’t seen many follow-through
days on these breakouts, neither the low-level nor the high-level ones.
The problem is occurring in many of the groups. We see names such as Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating),
Go2Net
(
GNET |
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Chart |
News |
PowerRating), Art Tech Group
(
ARTG |
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Chart |
News |
PowerRating), Tech Data
(
TECD |
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PowerRating), and Intel
(
INTC |
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PowerRating), for example all failed to continue. It’s most disappointing when
the breakouts occur on high volume and then the continuations fail.
Currently the Nasdaq is down over 100 points, but it still
remains in its trading range.
Today’s Watchlist:Â
(
OPTV |
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Chart |
News |
PowerRating),
(
OSIP |
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Chart |
News |
PowerRating),
(
GNET |
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Chart |
News |
PowerRating),
(
IMNX |
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Chart |
News |
PowerRating)
Open TV
(
OPTV |
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Chart |
News |
PowerRating) looked like it was going to break out on Monday, but it
quickly ran into resistance. OPTV has been in a low-level basing pattern for
some time now. Let’s watch if for a potential low-level breakout. Tuesday’s
strong volume suggests that there is some interest in the stock. On Wednesday we
are seeing an inside day, on reasonable volume, which may suggest simply a
pause. Continue to watch for a move above Tuesday’s intraday high.
OSI Pharmaceuticals
(
OSIP |
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Chart |
News |
PowerRating) is trading near its highs after
breaking out from a cup pattern on the weekly charts. It’s currently sitting in a
consolidation of roughly 4 points. Set your alerts just over the all-time high as
we watch for a breakout following this pause. The high volume on Tuesday may be
an indication of renewed interest in the stock. Should it breakout, swing
traders may want to wait for a continuation move, while daytraders may catch the
initial runup.
Go2Net
(
GNET |
Quote |
Chart |
News |
PowerRating) moved higher on Tuesday and looked like it
was poised to break out as well. Was there a continuation? No. But, we will still
add it to this week’s Watchlist so that we will be ready should it decide to take
out Tuesday’s high. Thus, we’ll set our alerts just over this level. The
Internet group has also been receiving a lot of attention as it comes off its
lows.
Â
Immunex
(
IMNX |
Quote |
Chart |
News |
PowerRating) looked like it was going to take out its
support level this morning, but it found some buyers just over the 50-day MA.
While it did take out one support level today, it did not take out the next key
level. Add this one to your list as we watch for a break below this key support
level. Daytraders should watch for another reversal to take out Tuesday’s
intraday low. Counter-trend traders will want to watch for a bounce off of the
support level that it retook intraday.
Ciao,Â
Check back at 2:00PM ET
for Trading the Techs PM.