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To: ms.smartest.person who wrote (457)	8/23/2001 12:59:17 PM
From: ms.smartest.person	of 5140

Technical Basics: Individual Setups 22-Aug-01 09:29 ET [BRIEFING.COM - Jim Schroeder] Over the last several weeks we have taken a look at the market from a very broad perspective down to the sectors. In this brief we will narrow it even further by taking a look at several individual issues. Line in the Sand The indices and individual issues will often spend a considerable amount of time drifting within well defined trading ranges. In the same fashion as sports records, trading ranges are made to be broken. When the well defined levels are taken out there is the potential for a trend to develop thereafter, even if the key barrier is retested. The first stock of interest is IBM which has shown a strong propensity to develop trading ranges. Are we poised for another breakout? It has retested the bottom of the month long range. A breakout would initially target the series of highs from April/May and the 50% retracement with a secondary barrier near the lows just prior to the April surge and the 62% retracement near 95.25. The ability to hold above this floor allows for a bounce but follow through beyond the downsloping trendline and the 20 day simple ma (blue line) are needed to turn the tide positive with potential to the top of the range. The next stock is Motorola (MOT) which also developed a well defined range. As mentioned, the key level can be retested following a breakout. In this case the retest was only on an intraday basis with MOT then closing below this line (17) and its 50 day simple ma (16.7). A failure to sustain a move back above these levels short term leaves the door open to further downside probes. Next supports are at the 50% and 62% retracements at 14.99 and 13.93, respectively. Turnaround At A Crossroad Stocks obviously never go straight up or down but this creates both opportunity and challenges. The opportunity is to buy the turnaround attempt at a cheaper price and the challenge is to reestablish the previous trend. This is the case for Schlumberger (SLB) which has been consolidating for nearly a month in the wake of the strong performance in July. The declining trendline has coupled with the 50 day simple ma to form an important resistance in the 53 area. The narrow consolidation over the last week after the Mid-August surge is a positive development but a sustained breakout beyond the above barrier is needed to argue for a retest of the initial recovery high just shy of 57 and potentially the retracement targets. Conclusion As we have seen in these examples, breakouts whether from ranges, trendlines or moving averages can lead to extended movement but the key as always is for the the breach of the key level to be sustained. If you have any comments or suggestions send them to Jim Schroeder -------------------------------------------------------------------------------- Copyright © 2001 Briefing.com, Inc. All rights reserved. Used with permission of briefing.com

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