Keep Watching Techs
Yesterday the NASDAQ generals and major techs provided strong leadership for the market. Cisco (CSCO), MCI Worldcom (WCOM) and IBM rose to new highs, with Microsoft (MSFT), EMC (EMC) and Lucent (LU) continuing strong moves after breaking out of eight-week bases last week. Save your daily charts of these last three stocks for future reference.
The semiconductor stocks continued their move, with Micron Technology (MU) popping 2 1/4 points in addition to good entry and excellent trading moves in SDLI and TQNT. Stay with these semis today if you get continuation entries. If you don’t, nothing lost.
The energies and cyclicals backed off, dragging the Dow down 39 points, but the NASDAQ closed at record highs, the NDX finished up 64 and the S&P gained 6 points. Volume was light at 690 million, but a bit deceptive, with so much institutional money concentrated in the major techs. The S&P made its fifth higher high and sixth higher close in a row; it’s probably time for a breather. As I’ve mentioned before, expect some resistance at the 1350-55 level. (That’s just a 78% retracement of the move from the 1376 high to the 1277 low.)
The XLKs (the technology sector spiders) broke to new highs yesterday along with the tech stocks I mentioned previously. They offer an excellent way to trade a move in the major techs, either long or short. I’ll post the component stocks and weightings of the XLKs in a future article.
Target Stocks Of The Day  Around 8:30 AM, the S&P futures are off around 4 points and the NASDAQ generals are down. The high relative strength stocks continue to offer the explosive moves, including (every now and then) the kind of outrageous move Go2Net (GNET) made yesterday. I hope someone out there go it.
Novell [NOVL>NOVL] is a narrow-range cup-and-handle pattern that looks ready to break out of an eight-week base. Four high relative strength stocks that are all set up well near their highs are NTL Inc. [NTLI>NTLI], VISX [VISX>VISX], Veritas [VRTS>VRTS] and Metromedia Fiber Network [MFNX>MFNX].
Internet names that look good include Yahoo [YHOO>YHOO], Lycos [LCOS>LCOS] and CMGI [CMGI>CMGI]. They all have the same pattern: They crossed and closed above their 50-day exponential moving average. If they institutions come for them, try to get on board one of them.
Staples [SPLS>SPLS] is set up to move out of a six-week base above both its 50- and 200-day moving averages. Biogen [BGEN>BGEN] is set up to challenge new highs on the third time through.
Program trading numbers  Buy: 15.10. Sell: 10.40. Fair Value: 12.80.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click on the link below to go to his new series of tutorial articles.