Daily Form April 22, 2008

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
TUESDAY APRIL 22, 2008       03:57 ET

There was a rather lackluster attempt to get the bearish side up and running yesterday despite some earnings reports that were less than impressive. The tiny range doji star candlestick on the S&P 500 (^SPC) chart was also an inside formation and underlines the fact that the market is at a key inflection point . Positive chart dynamics are much in evidence but there is also inevitable hesitation from some traders that bullish follow through could well bring the short sellers back into the fray.

Volume for QQQQ, the exchange traded vehicle for the Nasdaq 100 (^NDX) slipped down to just two thirds of its average daily volume. The cash index itself managed to register a gain of 0.7% and remains above the 200 day EMA. Many of the index’s constituents are similarly poised at long term moving average hurdles but it needs to be said that if the bulls are going to seize the initiative provided by the ever obliging central bankers then we need to see soon volume picking up and convincing breakaway patterns.

The iShares S&P Global Technology fund has penetrated above its 200 day EMA and last week’s heavy volume session suggests that some large bets are being placed on the possibility of a new leadership initiative from the sector.


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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HNZ  HJ Heinz Co.  

Some weakness is appearing in consumer staples. The chart for Heinz (HNZ) is revealing negative MACD and MFI divergences after registering a lower double top formation. Kellogg (K) has a similar tone.

JEC  Jacobs Engineering Group  

Jacobs Engineering (JEC) continues to surge higher on expanding volume and seems to be targeting the previous high around $102

KGC  Kinross Gold Corporation (USA)  

Kinross Gold (KGC) broke below two key moving averages yesterday on above average volume.