Earnings Warning Death Wish
Each morning this list will contain those stocks with the potential to
make a quick but tradable move in the first hour. The information listed
here is designed for the trader who catches the early morning momentum, between
the first five and 45 minutes of trading. Many stocks open each morning, run for
several points and then reverse. I will cover stocks with this potential and
highlight possible reversal points and resistance areas. These points need to be
monitored closely, as the stocks may turn quickly here. Be ready to lock in
profits quickly.
Those which are
consistent morning movers with large average daily ranges are now highlighted by
the word “Hot”.
Morning Outlook
The S&P futures are flat.
Watch for a turnaround in the first 10-30 minutes of trading. Keep an eye
on the stocks that gap the most in the morning. Use the Nasdaq and tracking
stock
(
QQQ |
Quote |
Chart |
News |
PowerRating) futures or
tracking stock as leading indicators.
Heading Up (at the
open)
Voicestream
(
VSTR |
Quote |
Chart |
News |
PowerRating) is trading roughly 16 points higher on strong
pre-market volume. Currently trading near 140, there are three near-term
resistance points to watch out for, 140 1/2, 141 1/8, and 143. A move above 143
could clear the path for a move to 148, roughly another 4% away.
Nextel Communications
(
NXTL |
Quote |
Chart |
News |
PowerRating) is trading up 3 points on over 100,000
shares. If it opens at the current trading price, near 67, it could head up to
the top of its near-term trading range, which is at 68 3/16. This resistance
level was tested for three consecutive days, so it may continue to cause
trouble. In a reversal situation, look for minor support at 64, and
psychological support near 60, as the next technical support level appeasr near
55, at the bottom of the trading range.
Alteon Websystems
(
ATON |
Quote |
Chart |
News |
PowerRating), mentioned as a potential long setup in Trading
the Techs PM on Monday, is trading 16 points higher. Look for resistance near
117 9/16, and again in a band from 119-120. The next resistance spot is a band
from 121 to 122. The pre-market volume is not as strong on ATON as it is
on the other hot movers today, so the momentum may not last. Watch for a
reversal.
Moving Down (at the
open)
Yahoo
(
YHOO |
Quote |
Chart |
News |
PowerRating) is headed lower on
strong volume. Currently trading near 104 1/2, Yahoo is below all near-term
support. In a reversal situation, look for resistance near 110. Otherwise
psychological support is near 100, and there is some technical support from the
1999 breakout near 95.
NEWS-DRIVEN MOVE: Aspect
Communications
(
ASPT |
Quote |
Chart |
News |
PowerRating) is trading down almost 50% on very strong
pre-market volume. Watch for some carry-over support near 20, but with
this type of pre-market volume, anything could happen. Look for another
support band from 18-19 if you’re considering going short.
Pinnacle Systems
(
PCLE |
Quote |
Chart |
News |
PowerRating) is getting
a roughly 50% haircut this morning. Look for psychological support at 10, which
its currently trading under. Below 10, look for scalping opportunities. Remember
to watch for reversals intraday as well.
Flat With Potential
(at the open)
Broadvision
(
BVSN |
Quote |
Chart |
News |
PowerRating) has tested 39 5/8 each of the last two days. Watch
for a reversal opportunity on a bounce off this level. The pre-market volume is
considerably strong for a stock that’s almost unchanged since the close.
Check back for Trading the Techs AM at
11:00 AM ET.
Until later,
Remember to use protective stops on
every trade.
Do you have a follow-up question about something in this column or other questions about trading stocks, futures, options or funds? Let our expert contributors provide answers in the TradingMarkets Question & Answer section! E-mail your question to questions@tradingmarkets.com.
For the latest answers to subscriber questions, check out the Q&A section, linked at the bottom-right section of the TradingMarkets.com home page.