Sun on the Horizon
Wednesday
and Thursday
of last week, I showed you charts of the Nasdaq which suggested that that index might
run up against resistance at a well-established internal trendline and 50%
retracements.
The Nasdaq pulled back, but has once again risen back up to that resistance
level. I suggest you review those two charts again and look at how the
patterns set up as the world watches Greenspan over the next two days.
As I’ve mentioned before, however, you should not focus undue attention on
indices. It’s the price and volume action in individual stocks which reveal the
true strength or weakness of a market.
With that in mind, let’s take a look at an interesting pattern Sun
Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating) is hitting right now. This pattern ties in with what
we’re observing with the Nasdaq overall.
SUNW is coming up to a confluence of the top of its four-month downtrending
channel, the top of its four-week range, its 50-day moving average, and its
38.2% retracement (off the Dec. high and Jan. low). We’ll want to watch how the
pattern unfolds from this point because the combination of all these technical
factors makes SUNW ripe for a resumption of the its downtrend. But a breakout
above it will be highly significant. In addition, Sun’s action could serve as a wider proxy for the overall Nasdaq since it is one of the major-leaguers of tech.
Best not to read or listen too much. Just watch the tape and the charts for the next
couple of days.
Till Tuesday,