Yesterday on IndexSkybox.com I drew up a chart of the Disk Drive Index (DDX.X) and how the chart looked to be setting up a "cup and handle" chart formation on the 60-minute chart. We set up a bullish trade at 103 and bullish traders should be scouring the group for stocks that look technically strong and correlating those stocks with the index itself.
Disk Drive Index Chart - 60-minute interval.
I've "outlined" what looks to be a "cup and handle" formation in the DDX.X on its 60-minute chart. Our alert to get bullish came just before yesterday's close at 103 and today this index is jumping our first hurdle at 105. Hurdle #2 resided near 108 with our ultimate trading target at 117. If this index is going to 117, there should be some stocks in the group that will get it there. I have NOT screened any of these stocks, but they are stocks that compose the DDX.X.
Disk Drive Index Components
Hutchinson Technology (NASDAQ:HTCH) Iomega Corporation (NYSE:IOM) Maxtor Corporation (NASDAQ:MXTR) Quantum Corporation - DSSG (NYSE:DSS) Quantum Corporation - HDDG (NYSE:HDD) Read-Rite Corporation (NASDAQ:RDRT) SanDisk Corporation (NASDAQ:SNDK) Storage Technology (NYSE:STK) Western Digital Corporation (NYSE:WDC)
Watching the NASDAQ here!
The NASDAQ Composite is trying its "darndest" to get back on our aggressive upward trend and 2,900 will be a big test for this index. If the 2,900 level is cleared, 3,000 looks to be a distinct possibility. We're going to need some help from the bond market in the form of higher yields (selling in bonds), but so far so good.
NASDAQ Composite Index Chart - 60-minute interval.
The NASDAQ continues too look strong. Yesterday we liked the way this index held the 2,725 level. Right during that test, we witnessed the 5-year note (FVX.X) YIELD turn green and off to the races we went! Today, if we reach the 2,900 and the 5-year note starts to weaken in yield (strength in price), aggressive traders may want to start locking in profits on stocks that they have nice gains in.