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

To: Stock2006 who wrote (932)	6/21/2005 7:30:48 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

LOL! The first thing I thought when I pulled up the chart was "Wow, I sure as hell was wrong about that one!" But it turns out that last post of mine was written on the morning of 5/26 before the market open. Message 21360331 TELK had closed the previous session at $14.48. As anticipated, TELK dropped down further from there to reach a low of $13.40 over the next 9 sessions (a loss of 7.5%). stockcharts.com[w,a]daclyyay[da][pb50!b200][vc60][iLg!Lk14]&pref=G Then TELK formed a textbook-perfect stochastic crossover buy signal from extreme oversold territory, and a day later ran northward with a vengeance, going on to gain 15.4% over the last 5 sessions. In the process, TELK pushed open the top BB, and the last two session saw TELK close outside the BBs. 139.142.147.218 So now what? Well, TELK is getting rather overbought again. There is a hint of an early sell signal in Williams, but that's about it. stockcharts.com[w,a]daclyyay[dc][pd20,2!b100][vc60][iLg!Lk14]&pref=G Notice how the declining 100 sma has proven to be effective resistance repeatedly. TELK tends to rally and stall just short of that level. And now, it is getting very close to that again. So I anticipate that TELK will get more overbought, then reverse. Probably that reversal will happen right about at the 100 sma one more time, and that would be an excellent place to look for a short entry IMHO. If TELK does not develop signs of failure there, then the next place to look for a short entry is solid chart resistance at $17.40: stockcharts.com[w,a]daclyyay[pa17.4!b100][vc60]&pref=G I think it is extremely unlikely that TELK will make it past that point. Personally, I would rather see it rally that high, because that would make the short a very high probability trade. The only problem with this short that I can see is that almost 10% of the float is held short, which represents a little over 8 days trading volume. finance.yahoo.com That is uncomfortably high for me. On the other hand, the recent rally sure looks like considerable short covering to me (profit taking combined with some degree of a short squeeze). I notice, for example, that as TELK rallied through the even-dollar points, the volume seems to pick up, and this is exactly where a lot of stops from short sellers would be expected to lie. Look at the volume as TELK crossed $15.00, for example: 139.142.147.22 So, maybe the risk of a short squeeze is all but over now, and we have just seen this scenario play itself out. Notice also that there is virtually no insider ownership of this stock; less than 300,000 shares are held by insiders, out of a total float of almost 52 million shares (0.45%). The only thing better than that is wholesale insider dumping of shares over the previous 6 - 9 months. Bottom line: I think it is too soon to short TELK, but maybe another session or so ought to do it. If TELK rallies through the 100 sma (unlikely), chart resistance above at $17.40 will almost certainly stop the advance, and would be a good place to lie in wait for a short entry. I would NOT short TELK unless and until it showed clear evidence on the intraday chart of failure, and I would also require more technical evidence of failure in the daily chart. But this one looks for all the world to be an excellent candidate for the Gush Bloated Pig Short List. T