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Pastimes : ASK Vendit Off Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (18784)	2/4/2001 1:20:23 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 19374

mishedlo, After forming a topping pattern in October, EMC began to fail, then there is what I consider to be an exhaustion gap (retail gap) up in the beginning of December. Next, there were two professional gaps down on big volume. This is very significant, IMHO, and predicts long, hard times ahead for EMC or any other stock in which you see these, regardless of how "good" the company and its products are (usually indicates a multi-month downtrend). The long-term moving averages are now realigning themselves, and EMC recently rallied up to that point. It has been testing that powerful overhead resistance for about two weeks, and now has failed at that test. askresearch.com EMC is a market and sector leader, and over the long term I believe it will do very well, and for that reason I would be somewhat hesitant about shorting it. If I were to short it, any indication that overhead resistance might be successfully retested would cause me to cover quickly. However, I must admit that disregarding what I know about the company, and looking at the chart as objectively as I can, it has all the earmarks of a failing stock written all over it: retail exhaustion gap, failed topping pattern, professional gap downs, and now failure at the test of critical overhead resistance at the 200 day ema. Furthermore, that failure was not subtle, forming a very bearish candle on Friday, which was preceeded by a Doji (evening star) candle about a week earlier, both indicative of reversal. There was, admittedly, quite a struggle between the bulls and the bears at the test at the 200 day ema, but clearly the bears have won this one. Support is at 62, then about 55, and it is at these points where I would look to cover a short. Because I consider EMC such a powerful company, I would also be more vigilant with a short. I would watch the hourly and 15 minute intraday charts, and would hold a short position as long as there were no crossover buy signals on the hourly, and the stock was trading below the 200 min ema on the 15 min chart: askresearch.com EMC has now gotten way ahead of itself on the downside, so I would anticipate a correction back towards the declining moving averages, and then failure at any test there is the most likely scenario. But a successful test there, particularly if followed by a correction back to the 200, with the 200 providing support and EMC rebounding up off the 200, would probably cause me to cover immediately. JMVHO...... Walkingshadow