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Stuck at the Lows

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The markets continue to feel the affects of declining consumer confidence, but are trying to move off of their lows. Perhaps some news that Intel sees second half seasonal improvement will help.

Nasdaq-100 Daily Chart

Yesterday the Nasdaq-100 (AMEX:QQQ) made an attempt at cracking resistance at $39.40, but was turned back. Today the tracking is down 1.60%, off its low, but still far away from testing resistance. With a daily dose of economic reports and light volume on the menu for the rest of the week, it's hard to get a read on which way the Qs want to go. Barring sometime of catalyst, it looks like the Nasdaq-100 wants to drift lower towards $36.50.

Qualcomm Daily Chart

Qualcomm (QCOM) might be might be able to keep the Nasdaq-100 closer to $39.40 than $36.50 if it can manage to hold above the two-month up trend and 50-day moving average. There probably isn't enough volume this week to push the stock past resistance at $67 this week, but might be able to make a run at it in the future if this pullback is mild.

Siebel Systems Daily Chart

Siebel Systems (SEBL) being able to hold above the April low of $23 would also help limit any possible Nasdaq-100 declines. The stock is plenty oversold after its $14 skid in August, so at least it has that going for it.

While those are just two of the Nasdaq-100 stocks, they paint a reasonable picture of what's going on inside the Nasdaq-100 - tests of support looks more likely than tests of resistance until we get this week out of the way.

Jeffrey Canavan

Questions regarding ImClone Systems

Last Thursday, in the 12:00 EST Update on OptionInvestor.com and IndexSkybox.com, I profiled shares of ImClone Systems (NASDAQ:IMCL) as a stock that bullish traders might want to be taking a look at from the bullish side near the $48 level. I received several e-mails from subscribers asking questions regarding, which column the vertical count was calculated from. There were also questions regarding the bullish support trend and how it is determined. There were also questions on why I only liked a 1/2 position bullish at the $47.75 level. All are good questions and I think fits with some of the things I may have eluded to earlier in today's 12:00 EST Update.

ImClone Systems Chart - $1 box

We thought the trade setup for IMCL was ideal considering market conditions. The Biotechnology Index (BTK.X) was gaining strength vs. the S&P 500 (SPX.X) and shares of ImClone (NASDAQ:IMCL) were strong versus the biotechnology sector. With the stock trading above bullish support trend (blue + was then at $43) we felt a break above $49 would bring some momentum into the stock short- term and give bullish traders an opportunity to buy a strong stock on a bit of a pullback into a base of consolidation.

On my bar chart, I have my retracement bracket set from $25.81 to $67.62. This put 50% retracement at $46.71 and 61.8% retracement up at $51.65.

Jeff Bailey
Senior Market Technician

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