Watching The Grass Grow

June 22, 2000
Dave Baker

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My latest trading lesson, Finding
Intraday Trendlines for Daytrading Part I, is also available now.

I would have to define (in part) a slow day as any day when I hear the phrase
“Alcohol, paper products, and furniture manufacturers are on the move
again.” As for tech, everything seems to be fine. The sector as a whole and
the leaders are pulling back on light volume. We’ll continue to watch for a
resumption of the current trend.

On Friday, we’ll take our weekly look at the Nasdaq Composite.Â

Semiconductor Technology
(
SCON |
Quote |
Chart |
News |
PowerRating)
broke out two weeks ago, but failed to show a continuation. It’s been
consolidating for roughly 10 days now, which is the ideal minimum length (though
I do acknowledge five-day consolidations) for a consolidation that I like to
see. Set your alerts at 38 3/4 when looking for a breakout. To be fair, we’ll
set an additional alert at 29 7/8, in case it breaks to the downside.

Looking at the short-term Ciena chart, we see that there is
quite a bit of space between each breakout level, making it an ideal trade (when
the opportunities present themselves). Ciena just moved above another breakout
level Thursday morning, which caught my attention. We’ll watch for a
continuation move tomorrow, possibly leading it into the next resistance level.
These levels can be found at the two highs set in April.

Puma Technology
(
PUMA |
Quote |
Chart |
News |
PowerRating) is tracing out a pattern that I have
seen on numerous charts this week. It’s somewhat of a cup with lopsided handle.
After moving above resistance, the stock pulls back to the 50-day MA, and then
pushes through resistance again. Aggressive traders may want to play a
continuation move on Friday, while the more conservative player will wait for a
move above the June 6 high. Look for more resistance at 50 and 55.

Tibco Software
(
TIBX |
Quote |
Chart |
News |
PowerRating) shows a little something for
everyone. Aggressive traders may want to catch the small moves on a breakout
above Thursday’s intraday high (for use on Friday). I’m setting my alerts for a
move above 95 1/4, at which point it may challenge 100. At 100, there is both
technical and psychological resistance. Look for the stock to move along with
the entire software index
(
$CWX |
Quote |
Chart |
News |
PowerRating).

We’re still watching Quest Diagnostics
(
DGX |
Quote |
Chart |
News |
PowerRating) for a
continuation move. Look for the breakout level to provide new support.

Today’s Shortlist:
(
CRDS |
Quote |
Chart |
News |
PowerRating)

Crossroads Systems
(
CRDS |
Quote |
Chart |
News |
PowerRating) moved
below support on Monday on very strong news-driven volume. For the next three
days, it traded up from the open. In this situation, we’ll monitor for a
three-day pullback from lows. It’s currently approaching its newly formed
resistance level, which may cause a problem. Look for shorting opportunities on
a failed rally into resistance. Set your alerts just under Thursday’s low, for
use on Friday.

Dave Baker

Check back tomorrow
morning at 9:15 AM ET for Trading the Open.

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Watching The Grass Grow

BUY THE FEAR, SELL THE GREED

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