JNPR: A Seminar Review

October 17, 2000
Kevin Haggerty

It was
casino day again, as the
chosen ones were taken well above Friday’s wide-range-bar explosion highs. I
looked at a Dow Jones headline that read, “U.S. Tech Stocks Sickly”
and yes, at that point the MSH and SOX were red.
(
SUNW |
Quote |
Chart |
News |
PowerRating) and
(
EMC |
Quote |
Chart |
News |
PowerRating),
both with earnings this week, were green all day with SUNW closing + 3 9/16 and
EMC +1 3/4.Â

On Saturday at the seminar,
we talked about trading what is, believe what you see, and getting on the train
in the same direction as the players that control the game. A follow-up example
of that is
(
JNPR |
Quote |
Chart |
News |
PowerRating), which exploded on earnings news Friday as it closed
+28.9 points or 14 .5% on significant volume. This wide-range-bar Friday close
in the top of the range on the daily chart put it in your trading plan as a
possible continuation entry for Monday or else a pullback trade at the .50 or
.618 RT of the wide-range bar.

Yesterday, JNPR gave you
two or three excellent trades on your five-minute charts, and illustrated three
of the sections we covered in Las Vegas. The first was an opening reversal or
OR. The stock opened at 226 3/4, down from the previous close of 228.43. It then
traded down to 224 on the 9:35 a.m. bar.Â

It then reversed as the
casino stocks got going and reversed the 226 3/4 opening, then the 227 1/2 high
of the 9:35 a.m. bar, and then gave you a continuation entry above 229 1/2,
which is Friday’s high. It did this on big volume and ran to 244 1/2. End of
the section review on ORs.

From 2:44:30 p.m., it retraced
eight bars to the .50 Fib RT level, to the 20-period EMA and closed in the top of
the range on an inside bar. The close was also above the 20-EMA. You could have
taken entry above 236 3/4, the inside bar’s high. This was a Fibonacci
retracement and pullback in a strong uptrend. End of section on the Fibonacci
RTs and pullbacks in trend.

JNPR rallied from the 236
3/4 high to 240 1/4, before forming a long, tight Slim Jim consolidation from
11:30 a.m. until the breakout on the 1:40 p.m. bar on good volume. Time of day
should be familiar to you Slim Jim players.

This breakout from the Slim
Jim came on the fourth time. Three is usually good, and the fourth time through
is excellent, although JNPR was extended from this two-day explosion. The stock
rallied to a new intraday high of 244 13/16, then retraced to the 60-period EMA,
before closing at 243. It is also
significant to observe the three rising bottoms prior to the Slim Jim breakout
and contraction of volatility with the narrow-range bars. End of section on
Slim Jims.

I thought this would be a
good follow-up summary on some of the seminar, and for those who didn’t attend,
you can pick up from the TradingMarkets.com Guide to the Market book you
get as an annual subscriber.

After two wide-range bars
up, the chosen ones are very extended and part of that range expansion will be
tested. Continuation entries are not foremost in the trading plan. Any decision
on those stocks is better made from the intraday charts.Â Air-pocket shorts can
develop if they open up and reverse yesterday’s highs. Examples of how extended
they are in two days are: ARBA +32%, NTAP +24%, and JNPR +21%. These are just a
few examples of the two-day casino results.

face=”arial, helvetica”>(December Futures)
Fair Value	size=2>Buy	size=2>Sell
13.75	15.25	12.55

Pattern
Setups

On the short side, look for air-pocket
shorts in the chosen ones on the intraday charts if they run out of gas.

Have a good trading day.

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JNPR: A Seminar Review

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