CTS & INTC & Technical Reversals
CTS looks close to its tecnical floor at the low of 93.5 it hit Friday. Monday morning will be telling - it it goes below the 93.5, then its going to drop a lot more before it rebounds. However, unless something else happens to dampen the market, I am expecting it to rebound from here. I might enter Monday, but only if it has strong volume and improving lower resistance for the morning.
INTC - You are absoluetly right AT. The floor of 82 wasn't telling in anyway on Friday, but the upturn around 2:30 was encouraging. The downturn again just at close was really depressing - especially for a Friday. So this makes it a tense opening on Monday for the whole tech sector. I am more concerned about ASND, but will check at the European markets early tomorrow and the domestic indices at open to see what damage has been done.
Technical/Chart Reversals: For those who might want to do a simple and pretty reliable test of whether a stock is in a reversal (minor or otherwise) there is an easy method. Print out the daily chart for a stock you are interested in. Then draw a line from the lowest low on the chart to the closest low to today that DOESN"T pass through any lows in between. An example that is easy to follow is the daily chart for CTS mentioned above. Connect friday's low to the low furthest back in time (several months) so that it only touches the bottoms of other lows in between. This is the line of reversal. For INTC, that point was crossed about three weeks ago when it leveled. Stocks can continue up after they level, or down, or just stay where they are for awhile. In any case, the best use of this method is to determine if a stock trend is slowing or reversing so that one can protect profits.
Similarly, if a stock has been in a downtrend, connecting the highs will tell you when a reversal may be underway when the high (more reliably the close) is above that line. For both cases, a sure sign of the reversal is if it goes below (or above for upturns) the horizontal line drawn from the most recent low after the stock peaked. I know this may seem complicated, but if I find a website that depicts this, I will post it. If you really need it email me and I will send a gif or bmp out to you.
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