Should Have Slept Late

  • August 1, 2000
  • Dave Baker

The futures have been trading in a range for a large portion of
the day. Because it is consolidating, we’ll have to let price action be our
guide and see where it takes the market. There’s no guarantee, but often, the
market moves out of a trading range late in the day.

Today’s Watchlist:  
(
DITC |
Quote |
Chart |
News |
PowerRating),
(
GBLX |
Quote |
Chart |
News |
PowerRating),
(
VRTS |
Quote |
Chart |
News |
PowerRating),
(
SUNW |
Quote |
Chart |
News |
PowerRating)

Ditech
(
DITC |
Quote |
Chart |
News |
PowerRating) broke
below daily support on Monday. After it broke its 200-day MA, traders showed no
mercy and just sold it off. It now looks like the 50-day MA is en route to take
out the 200-day MA, which is often a negative sign. The high-volume move on
Monday shows that there may be some conviction to this trend. On Tuesday, there
has been a continuation move, but it has not yet taken out weekly support. Watch
for a move below the weekly support level to offer short opportunities. Set your
alerts near this level.

Global Crossing
(
GBLX |
Quote |
Chart |
News |
PowerRating) is very close to testing the
lows set in mid-May. Watch for a move below this key level to set up a potential
short opportunity. GBLX has earnings due out today, so it’s likely that the
stock will experience some volatility. Look for a high-volume move on Wednesday in either direction. If it breaks support, set your alerts for a move on the
following day below Wednesday’s intraday low. 

Veritas
(
VRTS |
Quote |
Chart |
News |
PowerRating) broke the support line that I took a look at
last week. Following this move, it broke below its 200-day MA as well. The
200-day MA is often an important pivot point in stock price movement, thus we’ll
add VRTS to our list. With the next three support levels near 95, 90, and 87,
there is quite a bit of space that it has to move before we’ll know if it’s
going to head lower. While some traders may want to trade in between these price
levels, others may want to focus on the moves around the 200-day MA. On Tuesday,
it’s bumping its head against this level. 

Watch for a move back above the 200-day MA, as well as a move
below the intraday low from Friday.

Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating) broke out to new highs when it took
out 106 3/4 last week. Despite the fact that volume was strong on the breakout
day, it really had failed to move much higher. While it has completed the
bigger-picture cup that it started earlier in the year, it has not yet traced
out a handle. The bounce off both technical and psychological support on Monday
bodes well for the stock. Set your alerts for a long-side play near the
all-time high. Others may want to watch for short opportunities based on a
strong move below 100. If the second scenario pans out, then watch for support
at the previous highs of April, June, and July.

 

Ciao,

Dave Baker

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