Follow The Leader – The Market

  • August 2, 2000
  • Dave Baker

Index Checkup

It looked like we were on track for another negative day in the techs, but
the morning reversal fixed the situation, and provided a textbook trading
opportunity for futures players.

Both the Dow and the Nasdaq remain positive, but the techs are
hitting resistance. The same level on the Nasdaq that provided support has now
become resistance.

This action that we are seeing reminds us not to speculate on
price movement. Each day we don’t know what to expect, so just let price action
be your guide. 

Today’s Watchlist: 
(
AMGN |
Quote |
Chart |
News |
PowerRating),
(
PLUG |
Quote |
Chart |
News |
PowerRating),
(
NTLI |
Quote |
Chart |
News |
PowerRating),
(
SAPE |
Quote |
Chart |
News |
PowerRating)

Amgen
(
AMGN |
Quote |
Chart |
News |
PowerRating) was travelling in a
nice channel as it approached its former highs. After taking out that high and
looking to move higher, it failed and fell out of the channel. It’s now been
trading out of its range for three days. Watch for today’s rally to result in
either a move back into the channel, or for the bottom part to become a new
resistance level. Some traders may want to play the breakthrough move or the
failed attempt at re-entry.

Plug Power
(
PLUG |
Quote |
Chart |
News |
PowerRating) is making its debut appearance on the
Watchlist, or shall I say, the Shortlist. It’s retesting support, which was
broken once back in May, again on Thursday. The high-volume move that we see
here is news-driven. Watch for a closing move below support and a continuation
on Thursday.

NTL
(
NTLI |
Quote |
Chart |
News |
PowerRating) broke down last week on light volume. The volume
didn’t start to pick up until it began heading lower. The stock had been
struggling with its 50-day MA for some time and finally caved under the
pressure. We saw a high-volume move lower, followed by an intraday reversal on
Tuesday. This type of move could signal a bottom, but with the market acting so
weak, it may just have been a pause. Watch for another move below Tuesday’s
intraday low. Should it continue to head higher, traders might want to look for
opportunities relative to the support level that was recently broken. 

Sapient
(
SAPE |
Quote |
Chart |
News |
PowerRating) looked bad on Tuesday when it broke its
50-day MA on strong volume. It was rescued by a news-driven move Wednesday
morning. It’s currently trending higher in a channel. Traders should watch for
bounces off the top and bottom of the channel for entry points. Another way to
play this is to wait for breakouts and breakdowns relative to the channel. That
is to say, play moves outside of the range.

 

Until later, 

Dave Baker

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