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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: j g cordes who wrote (33644)	8/18/2001 11:34:47 AM
From: Return to Sender	Read Replies (1) \| Respond to of 68446

Jim although I agree with you I don't have the time nor the inclination to do such in depth research. Sometimes keeping things simple is surprisingly the best. For instance all I am attempting to do here is look for a catalyst for a bounce higher in the SOX. I believe we have an 80% chance that the SOX will bounce back higher once the lower Bollinger Band has been penetrated by the continued selling of the stocks found on the index. In my experience penetration of the lower Bollinger Band in combination with an RSI between 20 to 30 sets most stocks up for a reversal of trends. This is especially true when applied to an entire group of stocks. Lets just suppose for a moment that the SOX sells off another 20 to 30 points in the next two trading sessions. At 30 points (SOX 525) the lower Bollinger Band will be penetrated. Lets also suppose that we see almost 100 of the 197 stocks in the group listed here at SI with RSI's of 20% or lower. Would you bet the SOX will reverse its trend and start back higher? Or do you think the SOX will continue lower and test its lows from April all the way down to 450? stockcharts.com[m,a]daclyymy[pc13!d20,2!i!a1875][vc60][iLc20!La12,26,9!Lw25!Lk14!Lf!Ld20!Lg!Lp14,3,3] To me this is the real issue that decides the direction of the NASDAQ. It's true that valuations on this group are historically high so we could go lower. However to me the semiconductor group is about the only technology group worth playing because when the moves higher come many stock make very strong percentage moves higher in a very short period of time. The NASDAQ simply cannot move higher without strength in the SOX. Even when it does start back higher until fundamentals improve we will continue to trade in a range in my opinion. RtS