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Strategies & Market Trends : Classic TA Workplace
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To: Shack who wrote (63475)1/11/2003 4:50:40 PM
From: mishedlo  Read Replies (1) of 209892
 
From AD on the FOOL. (Note look at the interesting similarites in the chart of the naz and IBM).
near perfect correlation. Comments are his.
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technical-investor.de

technical-investor.de

The reformating of the charts has cut off text.

I find IBM nearing a critical juncture, approaching the 90$ barrier.
In recent days it has been stronger than the Nasdaq - closing on it`s highs on up-days.
Which leads me to believe that if the Nasdaq does go to it`s recent highs of 1130-1150 again IBM will easily slice through the $ 90.
Which will be interesting.
I`ve never watched such a large stock enter such a large gap in real time. Anyone know how they behave? Can a quick gap close be expected?
Depending on how the market is performing I may try and short a small position of IBM around 89.5 and add to it at 89.74.
The Stop-Loss would be a tricky proposition in the era of the false breakouts.
Maybe I will rather wait if it drops back under 90 and then short it.
Maybe I will go long a little on the 90 breakout, and add on a pullback with a stop of 89.75.
The problem I have with going long at 90 is that it is such an obvious mark on such an important stock that no doubt lots of institutionals are thinking about how to exploit the breakout-generated buying pressure - perhaps to unload huge positions.
If incidentially the market is a little weak after the breakout occurs suddenly we`re back at 87.
In the end which action I choose will depend on the stock`s and the market´s intraday behaviour at the crtitical time.
Anyway, if you are short it would be highly adviseable to cover above 90.
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