Motorola Coming Off The Ropes

July 17, 2000
TradingMarkets Editors

On April 10, 2000, my Chart of the Day featured the following analysis of Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating).Â

MOT is dropping down from a head
and shoulders top formation. Classical chartists would consider the
breakdown below the neckline on March 30, 2000 to be a sell signal and the
current four-day rally from those lows to be a potential fake-out. MOT is also
forming a downtrending channel and, at the time of this writing, is bouncing
down from the top of it. MOT is considered to be one of the leaders of its
sector and a continued sell-off in this stock will not be a good sign for
semiconductor stocks as a whole.

The day following my April 10, 2000 story, MOT plummeted 18
percent and, from there, continued to plunge another 30% over the next five
weeks.Â

What I have to show you today is testament to the wild and wacky
plot twists we often see in these markets.
Who would have guessed that less than two months after the preceding bloodbath we’d be seeing the following:

The action we see here is highly
constructive from an intermediate-term standpoint.Â

In TradersWire,
we wrote as follows:

Motorola (MOT)
is forming a handle at the top of its 10-week base. Last Thursday’s
surge to these levels was on high volume, a good sign. Traders will be on the
watch for a breakout.

Unless you been vacationing in Antarctica, you know that genomic
stocks like these eventually broke out of their bases in early-June and have
since been among the strongest groups in the Nasdaq.

While I can’t say that MOT will give us a breakout of similar
magnitude, it’s definitely a good addition for your watchlist. Watch for
continued accumulation patterns and constructive price patterns within this
base.

Until tomorrow,

Eddie

Motorola Coming Off The Ropes

BUY THE FEAR, SELL THE GREED

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