Chart Analysis » Technology

CSCO Chart – March 5, 2010

Alex F — Fri, 05 Mar 2010 19:43:52 +0000

I charted Cisco ($CSCO) while it was trading at $25.07 mid-afternoon today. What drew my attention to it was that it stopped at the exact same price as its intraday high from January 15th, $25.10, before backing off from it. There’s still time left in the day for CSCO to make a run higher, but hitting resistance at the same range, let alone the exact same price might mean CSCO is ready to take a breather from its current rally.

Adding to that theory is that CSCO is at the top of its trading channel and should at least bump sideways before reaching new highs. While CSCO has edged higher the past couple of days, the volume has been nothing to write home about. CSCO could take a $0.50 dip from its current level and not fall below its 10 day moving average. That would line up with the trend line of higher lows and could be a great entry point if you’re not already invested in it.

QLD Chart – Is Tech Braking?

Alex F — Thu, 28 Jan 2010 15:53:42 +0000

I charted the past year’s daily prices for the ProShares Ultra QQQ ETF (QLD) this morning while it was trading at $54.08. I’ve seen a lot more charts that are starting to look this way recently. They’ve ridden a long trend line of higher lows for most of the past year, but are starting to break down recently. QLD fell below its trend line of higher lows last week and then came back up to touch the same line again, but this time it acted as resistance. The saving grace for QLD so far is that its 100 day moving average gave it support this morning down to the penny at $54.05.

The trick now is deciding if that same moving average will hold or if the break from the trend line is foreshadowing of an even deeper correction. The best case scenario for QLD based on this chart shows a slow rise with the previous line of support remaining, but as resistance. I circled the past three times over the past year when QLD broke above oversold in the Williams %R indicator for the 14 and 28 day indicators. Each time the indicator moved out of the oversold range QLD produced a new leg up in the long rally. The key isn’t that it’s oversold now. That can stay the case for days or weeks. Watch when it moves higher to make it a true buying indicator. To be sure it’s not a head fake, maybe it’d be even smarter to wait to wait for QLD to move above the trend line I referenced above.

AT&T (T) Chart – August 31, 2009

Alex F — Mon, 31 Aug 2009 12:47:26 +0000

In honor of my first day of work at AT&T today, I’m posting a six month stock chart of T before it opens, after closing at $26.21 last week. The Dow Jones component might have more downside coming in the near term based on this chart, but has a bullish angle worth watching. The bullish part first – T is trading above its 10, 20 and 50 day moving averages and just saw a bullish crossover in the 10 and 20 day moving averages at the end of last week. It’s been on a nice run since the first half of July and support seems to be rising from its current level around $25.50. If support is found there, it could make another run at its line of resistance close to $27.00. Keep watching that line. It could be part of a rising wedge worth trading on soon.

The bearish part for me is lead by the Williams %R indicator. Both the 14 and 28 day periods are losing momentum and breaking below overbought. Confirmation on Monday and Tuesday of this break will be telling. If it holds, the run north could continue a little longer. Overall I’m leaning to the idea that T has more downside room to move than upside. With $27.00 as a ceiling, that only leaves about 80 cents to the upside. The downside could be all the way down to the lowest trend line of higher lows, close to $24.00 right now. The more likely/closer target is around $25.00 right now. That’s $1.20 below the current price. $25.00 (no line drawn) is also the mark of previous support and then resistance and then support again. I expect it to play a strong role again.

I have no trade on T scheduled yet. I haven’t followed it enough recently to know its patterns well enough yet, but I will be tracking it again now that they’ll be paying my salary again. To make sure I don’t miss a ridiculously good move, I entered a trade trigger to email me if T breaks above $27.00 or below $25.50. When T makes it above $27.00 I’ll consider buying calls, if not at least selling naked puts. If T makes it down below $25.50 I’ll consider selling $25 strike puts if I can get $1.00. That’ll give me cushion all the way down to the lower trend line I drew.

AAPL Chart – April 13, 2009 – Pre-Market

Alex F — Mon, 13 Apr 2009 13:16:05 +0000

I charted Apple (AAPL) before the markets opened on April 13, 2009.

AAPL is hitting potential resistance at the point of its high where it gapped down in September 2008
AAPL is at the high end of its current trading channel, close to its short trend line of higher highs
Williams %R still shows strength, but that will be the indicator to watch this week to see if it breaks below overbought signaling a sell

Opinion = AAPL should take a break and dip some before breaking to new highs. At a minimum I expect AAPL to slip to its 10 day moving average which is close to the short trend line of higher lows. I also could see AAPL coming back down to what used to be resistance (line not drawn) just above $100 where the highs got snuffed in December 2008 and February 2009. If AAPL comes down anywhere near $105 I’ll consider making it a buy.

RIMM Chart, Trading Channel Bound – April 2, 2009

Alex F — Thu, 02 Apr 2009 12:05:25 +0000

I charted the daily price action for Research in Motion Ltd (RIMM) for the past two months ending April 1, 2009.

RIMM hit resistance today on a trend line of lower highs that started after it gapped down a month and a half ago
Support for RIMM could be just a little lower at the longer horizontal line I drew or even above there where it found support yesterday at the trend line of higher lows
The two trend lines from the first two bullets are coming to a point soon meaning one side is going to break and likely in a decent sized move that is worth trading after a second day confirmation of the break maybe
RIMM closed below its 10 day moving average yesterday, opened up below it and then rallied above it
RIMM found resistance at its 50 day moving average which met with the trend line in bullet one – it broke above briefly, but closed just below
RIMM’s 20 day moving average is moving up and could provide support along with the trend line in bullet two

Opinion – Watch RIMM until you see which way it breaks to from its two longest trend lines collide. If that break holds for two closes, it could have legs.