Follow The Bounces
Retracement levels are a powerful indication of possible inflection points in
stocks and futures contracts. While not absolute indications or a Holy Grail,
they do alert you to areas where a change of direction might be taking place.
When you can spot them converging with other indicators or technical levels, you
should be ready to jump when the opportunity presents itself.
Cabot Microelectronics
(
CCMP |
Quote |
Chart |
News |
PowerRating) is staging a rebound off the 61.8%
retracement level of the Dec. 1, 2000 to Feb. 15 leg higher. The stock
undercut the 50-day moving average in Thursday’s trading and promptly reversed,
leaving a Lizard tail, which is following through to the upside in today’s
session.
While extended today, CCMP could provide additional momentum
plays in the next session or two, as often market moves play out over a greater
time period than one day. Daytraders and swing traders should be eyeballing the stock
for a continuation move.
Varian Semiconductor
(
VSEA |
Quote |
Chart |
News |
PowerRating) is following through in
today’s session after bouncing off the confluence of a trendline, a 38.2%
retracement and the support of the 20- and 50-day moving averages. This stock
appears likely to retest the Feb. 20 high.
Have a great weekend!
Duke