Follow The Leader
While I was expecting a small pullback in the tech sector this
morning, I was thinking that it might last longer than five
minutes.
These are my favorite days. Morning pullbacks, mid-morning
rallies.
Now, it is time for a new game plan. With the market
potentially having put in a bottom, it is time to look for a
leader. Which sector will lead the pack to new highs?
Taking a look at the semis, they are trying to break a near-term
resistance level. Set your alerts near 805 when watching for a
breakout.
width=”354″ height=”196″>
Often, the stocks in the leading group will
demonstrate strength in pullbacks.
Personally, I like to keep a list of the stocks
in each of the major groups on my desk, so that I can flip
through them in a heartbeat.
Today’s Watchlist:
(
LLL |
Quote |
Chart |
News |
PowerRating)
I took a look at Level-3 Communications
(
LLL |
Quote |
Chart |
News |
PowerRating)
last week, but I wanted to look at it from a different
perspective today.
Last week I mentioned the short-term
consolidation near the highs. From a bit of a bigger-picture
perspective, we can see a vertical channel. This channel has been
in effect for roughly a month, leading it through resistance
before pausing. Now we find Level-3 bouncing off the bottom of
the channel. If the pattern sustains, it should be able to push
higher and put in the continuation moves that we are waiting for.
Also noteworthy is the accelerating volume since
the pullback.
width=”354″ height=”196″>
Until this afternoon,