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Scrolling through the list

December 22, 2006

As the Nasdaq is looking ever more questionable and the SOX has definitely broken its uptrend support line, AAPL seems to have broken down in perhaps a very significant way. It has Definitively lost the horizontal and diagonal support and now it looks like the 50 MA too. That makes three strikes. Next likely support is at 78. The 200 MA is all the way at 70.

(Click images to see them larger.)

BHI is holding above 74.50 support and the 200 MA. Yesterday’s inverted hammer made a bullish Harami.

The continued strength from COH warranted a mention from Mike Coval in Wednesday’s Market Commentary.

CRDN is in a bull flag and holding above the 20 MA.

CTSH has a trend that looks a little long in the tooth and might be ready to break its Uptrend support and the 50 MA in one shot.

CWTR doesn’t look very pretty and just bounced off the underside of the 200 MA. Chart shows a couple bearish divergences with the MACD in the last year. Interesting to see how common these are and how powerful a signal they seem. Here’s an article on the subject.

HWAY looks to be warming up to breakthrough the 200 MA with the help of the 20 MA and support just below at 46.50.

ISE looks more likely to test the 200 than climb back up to the 50. The intermediate uptrend is coming in jeapordy with a test of the latest low.
A few posts back, I suggested a 50/45 bull put. I paper traded it and on the break of the support line closed it for a small loss.

KBH seems to be respecting the 200 MA and looks inclined to use it as support now. There is decreasing volume on the pullback from the recent high.

NTAP is right a the crux of testing horizontal and diagonal support and shows a potential double top with a bearish divergence on the MACD. Volume spikes recently have been on buying days.

RIMM had earnings today after close. There are a lot of writers pointing out overvaluation. The stock has more than double since August. But with earnings coming in at a penny more than the analysts’ expectation, the stock was up over 5% after hours. Here’s a good summary of the announcement.
With a fresh bounce off the 50 MA, if Friday closes up above 141, this could be a nice bullish entry for further upside movement. A Bull Put spread might be a nice conservative approach.
Implied volatility on RIMM ran up above 55% into this announcement. Perhaps there will still be a nice level of it to sell tomorrow.

UNT still has a longer term downward bias, but may find support at 48.80 and its 50 MA.

VSEA broke out big today, 5.7% on a day when the SOX is down 1.3%. Only news I could find was of a live webcast for their coming earnings announcement in January.

WCC looks to be having trouble. Continued selling today on big volume. 56.50 is likely support. Peter R. at Shadow Trader always says that volatility contraction leads to volatilitiy expansion. Notice the three Moving Averages coming together over the past few months. With the price now below the 200 with the others likely to follow, could this be the beginning of a more meaningful move down?
Perhaps a bounce a bounce off the 56.50 area support level could be played with a bull put spread for a bounce with the intention of buying back the short on continued breakdown.

ZMH wants to go higher though couldn’t quite make it beyond resistance today and formed a shooting star which technicall
y still needs confirmation, though the past few weeks have shown a number of bearish candle patterns.

It’s interesting to look through the list and find that I’m still bullish in the short term for 10 of the 15 stocks. However, some of those “bullish” stances could easily change very soon: NTAP, CTSH, CRDN

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