We’re Closed, Come Back Soon

June 9, 2000
Dave Baker

Make sure to register for the
upcoming course “The Baker/Ten Electronic Trading Course”, starting
July 7. Click
here to go to the registration page.

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

It’s time for our weekly look at the
tech index. We find the Nasdaq Composite almost where we left it last week. In
my eyes, that’s just fine. A consolidation after a move off a low is an
acceptable pattern. Let’s watch for a move outside of the trading range.

The Nasdaq 100 is now showing a similar pattern, as it consolidates near a
resistance level. What’s important is that the action of the Nasdaq 100 is
leading the Composite. Five days ago the NDX broke above its 50-day MA, and the
Composite followed the next day.

Today’s
Updates:Â
(
GETY |
Quote |
Chart |
News |
PowerRating)

Getty Images
(
GETY |
Quote |
Chart |
News |
PowerRating) completed a
three-day pullback from highs and is heading north again. Aggressive traders will
watch for a break of the high of the third down day, while the conservative
trader will look for a new high to be set.

Foundry Networks
(
FDRY |
Quote |
Chart |
News |
PowerRating) broke out
two days ago and is showing a continuation today. Look for it to move toward its
100-day MA before seeing more resistance. Note the trend of breaking out and
quickly moving toward the next resistance level..

Abgenix’
(
ABGX |
Quote |
Chart |
News |
PowerRating) split announcement
today helped it to gap over a key resistance level. Gaps are particularly
powerful when it comes to breaking resistance. Oftentimes a gap results in a
continuation, so that’s exactly what we will watch for. In some cases, stocks
will retrace to their breakout levels, but after running for a little while.
Look for more upward momentum on Monday, should Abgenix close above resistance.

Mentor Corp
(
MNTR |
Quote |
Chart |
News |
PowerRating) is forming an ascending triangle on
its daily chart under a second resistance level. Short-term traders should look
for a break above the topside of the triangle, followed by a move to the next
resistance level. I call this type of resistance “leftover
resistance,” because so much time has gone by since this support level
broke and became a trouble spot. The conservative trader will want to wait for a
move above R2 (the second resistance level). If you see a closing break with
continuation of the bottom of the triangle, it will be removed from the
Watchlist.Â

It’s time to move Tekelec
(
TKLC |
Quote |
Chart |
News |
PowerRating)
from the Shortlist over to the Watchlist. Friday’s action suggests a possible
break in the intermediate-term downtrend. Of course, you know the rules, so
you’ll have to watch for a continuation on Monday. Watch for volume strength
toward the close on Friday, as an indication of things to come. As always, look
for upside resistance at former support levels, such as the one just under 45.

The lawsuit involving MP3.com
(
MPPP |
Quote |
Chart |
News |
PowerRating) is now out of the way
(at least for the moment). It was unable to break through resistance on Friday,
so we will set our alerts and wait. I’m setting the alert for a break above 21,
which is 5% above resistance. We’ll revisit MP3.com if it sets off the alarm.
For now, we put it on the back-burner.

Our final stock this week is Alkermes
(
ALKS |
Quote |
Chart |
News |
PowerRating), which is
moving out of a low-level cup. The recent move above the 100-day MA has taken it right back to a former resistance level (note this trend). Set your alerts at 54
1/4 and wait for the move. Should the breakout occur, we will have to wait for a
continuation day. Look for strong volume to precede a move.

Have a great weekend,

Dave Baker

Waiting in the Wings:
More economic indicator fun – CPI out next week!

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

We’re Closed, Come Back Soon

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources