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The issue of support is intersting.While it is true that support is relative to past prices,note;1)many stocks"pop"off a stochastic low less than)(<) 20. 2)amat originally popped off a stochastic low a week back to 40 where it "hit" the wall(or a w%r at 90).it retreated all the way down to 28 and change in a selling climax.It did not go under 20 stochastically.This can be ,by itself interpeted as either bullish or bearish prognostically 3)it popped of the low and now sits at 32 and change.4)HOWEVER,and this is my interpetation-other indicators are very bullish;such as- w%r is moving strongly bullish.-now around 64-still a long way to go to even 80.Directional movement postive indicator has turned up and bullish,although neg indicator is still on top.on a bearish note we have an indecision candle.I take candlers very,very seriously as they are great predictors.This candle says"watch out we may be peaking".Basically monday is a very very important day.My gut felling is that we are in an upward movment in an overall downtrend.MACD is still bearish.note also that many techs,sold off late today-not a bullish sign for monday.I think the market is reflecting the fear of saddam,the japanese financial bank stocks, asia etc.Surely this is a lot of negatives to hit at once.I have not drawn the trend line for amat,but it would probably show resistance at 34-35.My plan is to sell monday-especially if it gaps up at the open around 34.i will hold for a retest of 37.00-40.00 onlt if the +directional line crosses the negative.Also note that amat very closely follows the dow,seemingly tick for tick.Technically the dow has resistance around 7600.(we went from 7800 to 7100 ,then we should go back halfway to 7450-7600,in theory) While it is true that investing in the most fearfull times usually pays off,my principal goal is capital preservation.hoping we test and break 40.00... |
