Nokia Looking Connected

There are number of positives you can see in the
chart of Nokia.

First and foremost, it has pulled back to the bottom of a its two-week range
and its potent-looking support off its 200-day moving average.

The 200-day moving average is the do-or-die level as far as many
institutions are concerned. When they see a stock move decisively above it,
institutions will often start muscling in.

Let’s talk about whether it’s going to find support and bounce
from here–keeping NOK’s two-month uptrend well intact or simply
break down from here.

There are two factors that weigh in favor of the support
holding.

1) The volume pattern looks favorable. A big spike in volume
coincided with NOK’s price surge on Dec. 5, 2000. On the pullback we’ve seen
since then, volume dried, suggesting that buyers are hanging in there.

2) Pockets of strength in the telecom equipment group. While
there are many laggards in this group, we see a small handful of stocks moving
in tandem with NOK. Check out QCOM, TLAB, and SONS.

The prospects will get even better if we see some positive
action come into the market.

Until Friday,

Eddie