After digesting the Fed's 25-point rate cut yesterday, the market has elected to move higher. The Nasdaq is up 54 points, and has finally risen above the congestion area that has held it back over the past week or so. It has also closed the gap that formed back on 6/13/01, and now has the 50-day moving average at 2137 in its sights. All sectors are participating, with semiconductors and networking helping the most. Advancers are beating up on decliners 19 to 8 at the Nasdaq, and only 6 of the Nasdaq-100 stocks are in negative territory. Apollo Group is down the most, but that loss is only 45 cents.
Open Wave Point and Figure Chart
Open Wave (NASD:OPWV), one of Option Investors recommended calls, is starting to open up to the tune of a $2 gain today. Looking at its point and figure chart, we can see a column of 20 Os that printed 6 columns ago. This is know as a "long tail down" in point and figure lingo, and usually offers a good trading opportunity when it reverses back into a column of Xs. Open Wave has not disappointed, and clearing resistance at $32 would open up the possibility of OPWV climbing to the bearish resistance line, now sitting at $38. We can see from pervious price action that Open Wave has had trouble cracking the bearish resistance line, so keep an eye on this level before getting caught up in Open Waves bullish price objective of $47.