Salad Tossin’

• July 21, 2000
• Dave Baker

The markets are certainly choppy today. I have images of little
stocks in a giant stock salad being tossed around. 

The Nasdaq Futures have been trending lower all day. 

Remember that Nasdaq volume was strong yesterday.

Because it’s options expiration, I expect to see a bit of
volatility. 

Today’s Update:
(
UIS |
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PowerRating) 

Unisys
(
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which was noted as a potential short on Thursday, traded lower on very strong
volume.

Today’s Real-World
Exampe:
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AMSC |
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On
Thursday American Semiconductor
(
AMSC |
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offering a good opportunity for a daytrade. In a pullback scenario, I like to
enter a daytrade roughly 1/4 point above the prior day’s intraday high. Looking
at AMSC on Friday, I’m reminded why I’m a daytrader.

 

Today’s Watchlist:
(
HOMS |
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(
WEBM |
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(
NEON |
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(
CRUS |
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(
ICIX |
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Homestore.com
(
HOMS |
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PowerRating) broke out of a low-level base on very strong volume on
Thursday. Now we’re watching for a continuation move. It was up a bit this
morning, but it has pulled back already. The Nasdaq in general is down today,
and it’s trending with the market, so look for it to move with the market.

Webmethods
(
WEBM |
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PowerRating)
bounced off newly created support. Unfortunately, on Friday, it was not able to
hold. Watch for a bounce near 150, where it may find psychological support. The
action today might make for interesting intraday setups. Swing traders should
watch for a continuation move.

Watch for
the 100-day MA to act as a potential pivot point. 

New Era Networks
(
NEON |
Quote |
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PowerRating) formed a descending pennant over the course of the
week. On Thursday we saw a rally out of the pennant formation, which led the
stock right into resistance. On Friday it pulled back. Look for support along
the 50-day MA. While it may be below that point intraday, watch for the most
action toward the close.

Cirrus Logic
(
CRUS |
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PowerRating) ran into resistance as well on
Thursday. It was able to close above this level. We could see some resistance
near those two false-breakout days. Take note that Thursday was a high-volume
day. On Friday, it opened below resistance and moved lower. Set your alerts near
that key resistance level.

Intermedia Communications
(
ICIX |
Quote |
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PowerRating) tested support again 
Set your alerts near the support level and watch for a potential breakdown.
Support may appear at 20, where we saw the false breakdown last week. Look for
a volume-backed move below support, followed by a continuation.

Until later, 

Dave Baker

Check back at 2:00PM ET
for Trading the Techs PM.