To: Return to Sender who wrote (4981 ) 8/21/2002 1:12:35 PM From: Donald Wennerstrom Respond to For the record, here is an assessment of the "technicals" from Briefing.com.<<Technical Levels : The recent stabilization in the markets has altered the proper approach from a trading perspective -- most would probably agree for the better. From a strictly technical perspective, the key support points are once again setting up well in the sense that the major indices almost look as if they might be operating in a normal market. Many of us had adjusted to a market that was falling to new five-year lows on a nearly daily basis. That dynamic had created an unfavorable risk/reward profile on the short side and had made trading the long side very close to impossible. At any rate, the key take away here is that the indices are beginning to take shape again so that the near-term technical assessment is no longer an exercise in futility. Note that each of the three major averages found support yesterday at their 50-day simple moving averages -- and they each held support on a closing basis as well. Over the prior six-month time frame, there are a limited number of cases in which even the most obvious support points held on the close. From a trading perspective, this suggests technicians can begin staking out support points with a reasonable expectation that they might actually hold. Of course, this means it should be worth your while to do the same. On the Nasdaq, there are three major areas to watch for downside support. The first is its 50-day simple moving average at 1371 which also happened to serve as yesterday's intraday low. Support around 1354 is the next area to watch as this served to confirm the highly debated double bottom pattern. This makes the final area to watch the index' 20-day exponential moving average at 1335. Each of those support points is relatively notable -- each is also reasonably obvious which is why the technical outlook is so very different than it has been over the prior six months. To the upside, look for initial resistance at congestion around 1398 to 1400 followed by another significant area in the range of 1419 to 1423. We've said it before and we'll say it again -- this area in the range of 1,419 to 1,423 is notable as it coincides with three points of interest over the prior five years -- 1) the September 11th-induced reaction lows which bottomed at 1,423, 2) the reaction lows of October 1998 which bottomed at 1,419 and 3) the ordinary course of its original uptrend during the Summer of 1997. -- Mike Ashbaugh, Briefing.com>>
