Are You Looking At This Resistance? Here’s What I See…

Pullbacks are healthy to an ongoing correction, but they still
aren’t very much fun if you are long!  The market saw just that in today’s
trading as the NASDAQ’s resistance around 2,150 proved too tough to pass in
only one attempt.

 

 

One point that is important
to look at is how old this resistance is.  Technically, it is about a year old
since this level dates back to early 2004.  This time period is about as long
as a 200-day moving average which took the NASDAQ several attempts over about
3 weeks to surpass.  This may not recur exactly since we have more gains under
our belt at this point, but it is a good benchmark to consider.

Many leading names took hits
as well.  The important thing to note is that almost all of them are still
trading above their 50-day moving averages.  Google (GOOG) has yet to
hit this line since going public.  Names like Apple Computer (AAPL),
Ebay and Starbucks (SBUX) all remain in good technical shape
although suffering from some minor selling.

 

 

Kinetic Concepts (KCI)
even managed to buck the trend by closing higher on the session.

 

 

The market has entered a
correction and however brief it may be; it is a good idea to use it in
identifying the stronger stocks and honing in on healthy pullbacks and seeking
out potential set-ups.