Why You Need To Look Under The Hood

December 17, 2002
Dave Landry

On Tuesday, the Nasdaq opened lower but quickly reversed
and rallied in early trading. However, it soon found its high and sold off back
to its opening levels. Then, after chopping its way higher, it resumed its sell
off going into the close. It really wasn’t as exciting as I tried to make it,
though. Essentially it was thin, narrow (range) and choppy trading.

The S&P was also choppy. It sold off fairly hard and
closed poorly.

So what do we do? As I look though hundreds of
charts, I’m still seeing many sectors, namely technology, that still look
like they have the potential to roll over. Further, as I “look under the
hood,” many individual issues have already broken down and/or look more
vulnerable than the overall sector. Therefore, I still think the biggest
opportunities could be in transitional shorts (e.g., First Thrusts, Bow Ties, Inverted Cup &
Handles etc.). Once again, no matter what you do, keep it light as the end-of-year games
will likely continue.

Looking to potential setups, yet again, I still think the semis have the potential to rollover.

Considering the above,
Actel
(
ACTL |
Quote |
Chart |
News |
PowerRating), my new “dead
horse,” still looks like it has the potential to continue its rollover
out of a First Thrust/Inverted Cup and Handle.