NTAP TA:
I'll try again. Correct me if I get it wrong again, please.
From mid-1997 through mid-November 2000, NTAP stayed above its 200-day simple moving average. It tested that line repeatedly, but that line held, confirming that the LT uptrend was intact.
In mid-November 2000, that line failed, and it failed in a textbook fashion: first plunging through that line, then coming back to retest the line from below, then going on to lower lows.
Since then, the stock has never, not even briefly, been above the 200 day simple moving average. That line is now at 20, so, if this uptrend continues, we are in for a major test soon. If we get above that line, I'd expect a rally, then a dip to retest the line from above, and a bounce right at that line, and then a LT uptrend (with, of course, a lot of ST volatility).
Looking at the 50-day simple moving average, the stock spent much of May and August of 2001 above that line, and then went on to lower lows. So, getting above that line (even staying above it for a couple of weeks) has been a false signal, twice.
So, you're right, a stall just below 20 has a high probability. If it happens, it would indicate the downtrend since the all-time highs is intact, and much or all of the gains since 6 could be given back.
For now, I've done all the selling I want to do, I'm now up to 24% cash. If the stock hasn't moved above its 200D SMA by January, I will probably sell my 2003s on any approach to that average. |
