Thursday’s Top Stocks

August 25, 2004
Tsutae Kamada

Some market participants
say it is not fair to talk about volume because we are still in the summer
vacation. It may be true, but a breakout without increasing volume
does not convince investors and traders.

Let me give you an example. Today, Amgen Inc (AMGN) took out its 200-day
SMA (simple moving average). As you know the 200-day SMA is a widely followed
indicator to determine the long-term trend of stocks. Has Amgen begun its
uptrend? Pay attention to volume. It was only 5.7 million shares. Normally AMGN
trades about 8.1 million shares a day. It could be just a short covering rally.

Almost situations are identical with Nasdaq-100 Index Tracking Stock (QQQ)
and Diamonds Trust (DIA). Although DIA’s volume exceeded yesterday’s
level, it was still about its daily average. QQQ traded 88 million shares; it
was 10 million shares less than its daily average.

^next^
Now, let’s look at three stocks for Thursday:

Internet HOLDRs (HHH): The issue is facing the 50-day SMA and the 50%
Fibonacci level to overcome. Notice light volume.

Linear Technology Corp (LLTC): The stock attempted to regain its losses,
but it still closed below its bear flag. Look for a resumption of the downtrend.