Self-Fulfilling Prophecy
Another day of no follow through.
Analysts are punishing many of the biggest names and perpetuating
the nervousness in the market. Just take a look at the
semiconductors, which are in their greatest correction since 1974.
Today’s Watchlist:
(
ALTR |
Quote |
Chart |
News |
PowerRating),
(
AMAT |
Quote |
Chart |
News |
PowerRating)
Altera
(
ALTR |
Quote |
Chart |
News |
PowerRating) has been moving higher since its gap lower
two weeks ago. This uptrending price channel may actually be a
bearish flag. The simplest way to play the bearish flag is to
await a move below the bottom trendline of the channel and take a
short position. More conservative traders may want to wait not
only for a move below the channel’s low, but also below the low
of the flag’s pole. Also noteworthy is the ADX reading of almost
40, which suggests that the current trend is strong.
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) has broken down
from another short-term consolidation. AMAT continues to trend
lower with the semi group. This group has gotten no reprieve and
continues to be downgraded and punished by both traders and
investors. Following each breakdown, it seems to test the next
support level before heading lower. So where is the next support
level? It is at the October 1999 high, the point from where it
broke out originally. Watch for a move to this level and a retest.
Again, noteworthy, is the ADX reading of over 40, which suggests
that the current trend is in fact quite strong.
