Patterns and Trendlines
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .10 points lower and the Bond Market Futures are trading up 3 ticks.
Often on pullbacks, I like to draw a trendline from the recent high and look for a breakout above of that line. For instance, notice how Phone.com [PHCM>PHCM], on the Pullbacks List, broke a trendline from highs today(a). This suggests that its uptrend may have resumed.
Clearnet Communications [CLNTF>CLNTF] and Metamor Worldwide [MMWW>MMWW], both mentioned last night, still look interesting to me.
As you know, the Trading Where The Action Is List contains the most volatile stocks and is only for the most aggressive traders who are willing to assume a higher degree of risk in order to capture larger gains. With that said, GlobeSpan [GSPN>GSPN] is a loosely formed cup and handle that looks poised to break higher and US Internetworking [USIX>USIX] broke decisively out of a high level consolidation today.
On the short side, Etoys [ETYS>ETYS], mentioned last night, sill looks vulnerable.
Recently, I mentioned that “old tech†(i.e. IBM) seems to be having a tough time. Pitney Bowes [PBI>PBI], on the Pullbacks From Lows List, is one such stock that looks poised to resume its downtrend.
Best of luck with your trading on Tuesday!
Dave Landry
PS – Reminder: Protective stops on every trade!