Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: Gush who wrote (495)	6/1/2005 1:37:41 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

Hi Gush, Very nice charts, thanks. HANS has gotten in the habit of pushing against that upper BB rail. Now as you say, it looks quite ready to repeat that performance, having closed today above final resistance. HANS is now in a blue sky breakout: 139.142.147.218 Note the trend in the relative strength compared to the Nasdaq composite. The breakout is not yet confirmed, but I have every expectation that this will happen. HANS should push right up on the BB rail, then pull back to the middle of the BBs, where another long entry could be taken. Looks like an excellent trading stock to me, and one could make a case for maintaining a core position in a stock this strong, provided the relative strength remains high. Dunno where you found this, but thanks! UNH is another fascinating chart.... those BBs are just cinching down on UNH like the pincers of a crab. UNH is cornered like a rat, and has to bolt one way or another, and push one of those rails open. But the $64,000 question: which one? Well, I think clue #1 is to note that UNH is in a solid and rather orderly uptrend: stockcharts.com[w,a]daclyyay[dd][pb50!b200][vc60][iLg!Lyb20,2.0]&pref=G Second, UNH has been in an increasingly solid uptrend for over five years: 139.142.147.218 There is zero indication of technical or chart deterioration that I can find. Now just in case further supportive evidence was needed, how about this: the BB width is at 1.6, which is the lowest reading in well over a year. Now look what has happened on previous occasions when the BBs got extremely contracted: stockcharts.com[w,a]daclyyay[dc][pd20,2!b200][vc60][iLg!Lyb20,2.0]&pref=G You can see that in December and March, when the BBs were extremely contracted, there was a rather explosive push upwards on the upper rail. In between, there was a much more orderly series of repetitive nudges upward on that rail. Now, take note also, that now the BBs are considerably more contracted than on any of these prior occasions, when you consider BB width in relative terms (i.e., relative to price) rather than absolute terms (i.e., as in the metric at the bottom of the chart above). I think that puts into better perspective just how tight these BBs really are. But wait just a minute... how about the regression channel? Well, the long-term (5 year) chart shows UNH to be very near the top of the long-term regression channel, and in fact it was beaten back recently from that rail: 139.142.147.218 But I think UNH is in the process of redefining the regression channel limits. One reason I think so is because of this chart: 139.142.147.218 which shows a much more steeply sloped regression channel, and more upside room for UNH before it hits that upper rail. So UNH is an excellent long position, particularly if it can pull back a bit more to about $48. But that is not very far below, so the downside risk here is really quite minimal. That lower BB rail, which of course is support, is at $47.81 which is only 1.6% below where UNH closed today. That risk is so low one would be tempted to just enter long right here and forget about trying to get a more optimal entry, because you can set a very decent stop just below the lower BB rail, and if you are wrong (very unlikely, IMHO), your loss is quite modest. Bottom line: a very nice long position with an unusually favorable risk/reward profile, IMHO. In fact, both UNH and HANS are good long positions, ableit for somewhat different reasons. Dunno where you unearthed these things, but I sure hope you keep them coming!!! Thanks again, T