Stay Busy
If don’t like to short, then in a market like this you’re sitting on the
sidelines. But should you just be twiddling your thumbs? No. You need to be staying
on top of the market in search of opportunities that will emerge when the worst
is over.
So you want to stay busy, doing your homework, studying the patterns, and
watching for future setups.
This is not the first time I’ve mentioned Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating).
It comes to mind once again because of the interesting and
constructive pattern it’s forming.
To give you the groundwork on current price and volume action,
let me refresh your memory on what
I said on November 16, 2000:
QCOM is trying to break out of a five-month base. Volume is
not that heavy Thursday, but there have been some price surges on heavy volume
over the past two months–strongly suggesting that institutions have been
heavy buyers. Also, a surge like this is a big accomplishment on a day when the
Naz is weak and getting weaker (as of the time of this writing). This is a
good illustration of the concept of intraday relative strength which Jeff Cooper
talked about in his trading lesson “Finding
the Next Hour’s Winners Using Intraday RS.” If the market turns
positive going into the close, QCOM could get an extra boost.
Since then, QCOM has dipped back below the breakout level,
shaking out the weaker players. But each time it’s done this (including what
happened today), it bounced back. This generally sideways action in the face of
a weak Nasdaq is a positive sign. Also, much of the price action is contained
between QCOM’s 200-day moving average and the breakout level, so we could see a
breakout from this range soon. Volume patterns continue to support the upward
scenerio.
Until Thursday,