Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: Jerry Olson who wrote (79784)	1/21/2000 12:49:00 AM
From: Teresa Lo	Read Replies (1) of 120523

The Trader's Notes for Friday, January 21, 2000 For days we have been following the test of top for most of the major market indices, and we are waiting for a catalyst to move the market. Until there, there is nothing to do but wait. Let's look at a few stocks that are at crossroads. AAPL is testing it's all time high. Yesterday, it gapped up on better than expected earnings but met with sellers at the high. Noteworthy was LGTO, which failed its test of top in December 1999 at $80. The power of failed tests is great indeed and stock traders always need to be alert to tests in all timeframes, but place particular emphasis on daily chart. SUNW is also testing its all time high on the daily chart. ORCL is testing its all time high as well. The bottom line about tests: If it cannot pass and successfully "break out", then sellers will show up and take control. There are two targets for a failure. The first one is the 20-day EMA below. The second is the other side of the trading range, marked by the lower blue line drawn on the chart. The Trader's Notes prepares the trader for the day ahead, providing observations on market sentiment, internals, support/resistance levels and key pivot points in the major market indices using the daily chart. Use of moving averages and the Average Directional Index (ADX) indicator helps to determine whether the market is trending up/down or chopping sideways. Using Japanese candlestick charting techniques, observation of market action around support and resistance assists in the analysis of supply and demand based on fundamental principles of classical technical analysis. The results set up "if-then" scenarios used by the trader during market hours. Technical analysis is not used as a tool to "predict" the future or to pick tops and bottoms. It is used to detect areas of trend change and emerging trends. In a trading range, traders generally look to buy at the low end of the range and to sell at the high end of the range ? or stay out all together. In a trending market, traders generally look to enter the market on every retracement until it enters a trading range and ends on a test. The goal is to buy every dip in an uptrend and sell every rally in a downtrend. The trend is your friend until the end when it bends! Charts specific to this article are available at intelligentspeculator.com

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