Daily Form December 19, 2007

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
WEDNESDAY DECEMBER 19, 2007       07:24 ET

The long lower tail to the hammer candlestick which sits perfectly astride the 200 day EMA could be evidence that the Nasdaq Composite index (^IXIC) found support at a key level in yesterday’s trading. There was not the same kind of compelling evidence of a floor being put in place that we were given from the dramatic trend day reversal off the bottom of the range that we saw in late November, and I must confess that I am not convinced that the downside testing is over.

The Russell 2000 (^RUT) produced the most impressive reversal yesterday and the engulfing green candlestick could give one a little more confidence to the hyptohesis that a near term support level may have been established. Action in the overseas markets overnight has been varied and I sense that global traders will be watching the US markets closely over the next couple of days for clues as to the best positioning ahead of the holiday shortened week ahead.

The S&P retail sector index (^RLX) also pulled out of its recent decline near to a critical level.


The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session.
For full details on time horizons, risk management and hedging techniques please visit http://www.tradewithform.com

HGSI  Human Genome Sciences  

Here is the comment that I made on Monday regarding the triangular pennant pattern for Human Genome Sciences (HGSI) - "A directional breakout is imminent and I would suspect that it is upwards."

SYNA  Synaptics Incorporated  

Further to yesterday’s discussion regarding Synaptics (SYNA) the stock plummeted another eight percent yesterday but may now find support at the 200 day EMA.

RS  Reliance Steel and Aluminum  

Reliance Steel (RS) is in the middle of its trading range and appears to be finding support above all three moving averages.

JNPR  Juniper Networks Inc.  

Juniper Networks (JNPR) has a pullback formation and the stock appears to be finding support at the converging shorter term moving averages.

FFHL  Fuwei Films (Holdings) Co. Ltd.  

Fuwei Films (FFHL) is a volatile and speculative stock that may not suit everybody’s trading style but there is evidence of a flag/pullback that has now connected with two moving averages.

No comments: