Vive La Resistance!

  • August 15, 2000
  • Dave Baker

While the S&Ps couldn’t get over 1500, the Nasdaq has had
trouble all day with 3850. As I write this, the Composite is trading at 3852.72,
but let’s see where it is by the time the article is published. Otherwise,
volume is light. I guess all the traders are at their summer homes in the
Hamptons. No one expects to see much volume until Labor Day. 

S&P futures traders should be watching for the cup-with-handle formation on the 30-minute charts just under 1500.

With light trade in
effect, use caution when holding positions overnight. Continue to lock in a
portion of your gains.

Today’s Watchlist: 
(
BRCM |
Quote |
Chart |
News |
PowerRating),
(
ATML |
Quote |
Chart |
News |
PowerRating),
(
REGN |
Quote |
Chart |
News |
PowerRating),
(
TQNT |
Quote |
Chart |
News |
PowerRating)

On the charts, the green line is the
200-day MA and the blue line is the 50-day MA.


Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating) is about to test resistance at 250 once again. With the
all-time high near 260, there will be enough breathing room in a breakout
scenario. With this type of setup, you first need to decide on your trading
personality. Aggressive traders may want to open a position on a breakout above
250 and try to ride it up to the next resistance level. Conservative traders
will want to wait for a new high breakout followed by a continuation. The latter
group should set their alerts near 260.


Atmel
(
ATML |
Quote |
Chart |
News |
PowerRating) gapped higher on Tuesday
but ran right into resistance. How many times have we seen this scenario? The
reason I’m adding it to the Watchlist is because there may be a second move, and
that’s where we need to be. The high volume today, although most likely
news-driven, does indicate a possible follow through. Watch for a long
opportunity based on a move above the downtrend. Beware of potential resistance
at both the 200-day and 50-day MAs. Some traders may want to watch for short
opportunities based on a failed move.

Regeneron Pharmaceuticals
(
REGN |
Quote |
Chart |
News |
PowerRating) is moving on news on Monday. This move is backed by greater than ten
times its average volume. Should it close at a new all-time high, watch for
another move higher on Wednesday. Ideally, the move should take out the intraday
high from Tuesday on strong volume as well. The biotech group has been quite
strong lately, so traders should be watching it intently.

Triquint Semi
(
TQNT |
Quote |
Chart |
News |
PowerRating) closed above its
200-day MA for the first time in weeks on Monday. On Tuesday it took out the lip
of its low-level cup formation. Should we see a continuation of this low-level
breakout, TQNT may make a move to fill the gap. If you take a position based on
a continuation move above Tuesday’s intraday high, be aware of resistance at
both the low from June 26 as well as at the 50-day MA, which is roughly 9/16
higher. Look for strength in the semis to carry TQNT with it.


Until later, 

Dave Baker

P.S. I will be speaking at
the Online Trading Expo in Ontario this Sunday.

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