Daily Form March 5, 2008

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
WEDNESDAY MARCH 5, 2008       07:20 ET

The nagging doubt that I have from yesterday’s reversal session is whether traders will be convinced that the January lows have yet been satisfactorily tested and that the way is clear for another attempt to try to rebuild an assault on the upper limits of the triangular range patterns. The index chart which could most plausibly be adduced in favor of a determined effort to test key support is for the Nasdaq Composite (^IXIC).

I remain sceptical that we are done on the downside and as with my comment yesterday I am concerned about the descending wedge pattern that is still in development and could continue for several more sessions before a resolution of that pattern becomes critical.

The late reversal on the S&P 500 (^SPC) still leaves me wondering about what would happen if the market looked over the abyss in the vicinity of the 1270 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.
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NUAN  Nuance Communications Inc.  

Nuance Communications (NUAN), mentioned recently on the long side, finally produced the expected surge with an almost ten percent gain during yesterday’s session.

AVID  Avid Technology Inc  

Yesterday I drew attention to Avid Technology (AVID) and suggested that the valiant pullback effort seemed to have reached an area where sellers could be re-energized. The drop yesterday could see further follow through in the sessions ahead.


Further follow up on a discussion from yesterday - the Biotech Holders Trust (BBH) continued to move higher after the break above all three moving averages in Friday’s session.

CTSH  Cognizant Technology Solutions  

Cognizant Tech (CTSH) has a flag like pattern that resembles the pattern for Nuance and I would not be surprised to see a similar price surge in coming sessions.

BJS  BJ Services Company  

BJ Services (BJS) dropped below the 200 day EMA and the momentum and money flow suggest that the recent break above this key moving average and subsequent fall below may have expended all of the constructive price behavior in the near term.