To add to the possible double bottom scenario, the NDX did make a slightly lower low yesterday, and I agree the COMPX looks like it will follow suit.
But, along with those lower lows, I notice a bullish divergence forming on the macd (12-26-9, daily chart). Also, with some stochastics counts, a bullish divergence could be forming as well. I'm using the term bullish divergence to refer to a lower low in the stock price accompanied by a higher low in the technical indicator.
Of course, bottom-fishing in this manner could be risky, as a very hard break to the downside could take the technical indicators to lower lows and break the divergence. Some pretty good technical traders around SI are looking for a hard break down, so I am a little uncomfortable in making a big time long play on the QQQ's or some similar looking tech stocks. But, if the divergence holds over the next few days, there could be a nice buying opportunity.
Even if we do get a rally, it won't be the final bottom. |
