Over The Hump
If yesterday was “hanging
in there,” we’ll call this morning
“over the hump” as the Qs broke out of their recent range, confirming
the bullish bias we noted yesterday. While much of the action occurred prior to
the general session open, intraday support angles have been strong and have
combined nicely with a few trend-continuation triggers for those missing earlier
entries. Daily and weekly charts remain bullish, and we now have developing
hourly support until broken. We’ll certainly keep an eye on the developing
stochastic strength — or lack thereof — of this cup-and-handle extension climb
on the weekly time frame. For those alert traders using ECN block Q purchases as
indicators to combine with your chart setups, you may have noticed several
significant Island block buys made in the $41.70 – $41.78 range during the early
session upon breaking Tuesday’s highs, which has recently been providing nice
confirmation of chart bias. As I mentioned in yesterday’s
column, considering a high-of-day break as a low-risk entry opportunity
would have worked nicely.
Wednesday January
9, 2002Â 12:00 PM EDT
Despite the tight
range yesterday, the Qs had one of their classic trend-continuation setups as I
alerted in TradersWire
Interactive yesterday. The setup once again reflected oversold stochastics
on a relative basis as the Qs held price support, which was good for an
immediate $0.15 pop. Here is the setup and result:
Tuesday January 8,
2002Â 12:00 PM EDT
We’ve seen this
setup play out successfully so many times over the past several months, and it
has been one of my favorites for some time. Remember back to early December when
we saw the same thing occurring on the daily chart just before a $2.50 multiple
day move (refer back to my columns on 12/4
and 12/5)?
If you’re still wondering how stochastics can be oversold well above the 20 band
— and I get that question frequently — it’s the approximate hold of the 15-MA
price support that tips the scales from a weakening market to one that’s biased
toward oversold.
Good Trading!