The Brighter Side Of Life

Opportunity in the markets is something
you have to search for relentlessly as we witness the collapse of repeated rally
attempts in the overall market. If you are long-biased, you must continue swing
from vine to vine as sectors rotate out of favor. Dump the losers and keep going
where the relative strength and trend leaders are. 

Power producer Calpine
(
CPN |
Quote |
Chart |
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PowerRating) is one good example to focus on. 

CPN is in the right group. The energies continue to generally
hold up. No surprise then that in spite of across-the-board weakness, CPN
managed to score a 3-point gain, magnetized by its October 2000 highs. Once it
arrives there, it may pullback off the highs, as well as the internal trendline
shown above. 

Tradable? Not quite. You’ll want to monitor the pullback
behavior and see whether support comes in at a key retracement level or lows of
a range. Consider also the possibility of a breakout to new highs with heavy
volume fueling follow-through.

See you tomorrow,

Eddie