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Technology Stocks : Santa Cruz Operation (SCOC) Going Up?
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To: Trooper who wrote (337)11/1/1998 11:42:00 AM
From: Pullin-GS  Read Replies (1) of 656
 
Some TA for SCOC as of Friday close:

Early last week brought an unexpected rally of sorts for SCOC on anticipated good news from CNBC coverage. As is often the case, the day traders loaded up in the days preceding, as did some long term investors who truly believe in SCOC. But upon the actual news release the sellers came in force, selling SCOC hard-the-news. Allot of technical damage has been done.

SCOC volume on Thursday proved an exceptional day...with SCOC ending the day trading over 250% the 21-day-Volume-EMA. As a believer in Volume indications, it was evident to me that SCOC could not maintain these levels, and the following days would prove the overbought conditions. I shorted SCOC at 5 3/8, 5 9/16, 5 5/8, 5 11/16. I am currently holding my entire short. Being that SCOC volume has returned to levels below the moving averages and SCOC is still marginable, I am considering adding to my position on the next flare up above 5 1/4. The old saying that price follows volume decline is very accurate.

SCOC managed to break out above the upper envelope of the Bollinger Bands on Wednsday, but all momentum was lost and SCOC quickly retreated back within the upper envelope. BB has support marked at 3 15/16, and resistance at 5 3/8. Momentum is downward, and is expected to take SCOC to low 4s quickly. Bearish.

MACD Histogram turned down after a two week long upward push with no pullbacks. This is very bullish in that it points to distribution. Past history has proven that when this has occurred with SCOC a reversal occurs that lasts anywhere from 2-3 weeks. Very Bearish.

RSI had actually gone above 70 for a period and then quick retreated back down to 63. This is critical in that most systems/scans utilize an RSI test that looks for lost momentum runs when a stock breaches 70 on the downside. Many traders/investors have seen this and will short/sell accordingly. Its the "herd" mentality of fear that will kill SCOC quickly IMO. This is Very Bearish.

The Ultimate Oscillator had a bullish divergence....often this indicate a key reversal at low points in a stock's movement. Being the SCOC is currently trading high on the daily chart, I would avoid buying on the indicator alone. Bullish.

Smoothed Rate of Change (SRoC) had a bearish down-turn on Thursday. This is used to identify key reversals. Bearish.

Best of luck to all......
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