On Monday at 01:30 EST, Jeff Canavan gave traders some insight on what was moving higher that day. One sector mentioned was teleconferencing. Traders/investors now have some trading sessions behind them to assess the group further and get a better fell of how things shake out from here. Most investors/traders are well advised to not just jump into things on first impression, but do some research into a stock and monitor its technicals to then make a more calculated assessment of how to trade the stock.
Here's the process I'm going through as it relates to WebEx Communications (NASDAQ:WEBX) and something that traders/investors might want to do with other stocks they're considering buying. Subscribers that have attended any of our on line seminars are familiar with WebEx, as that is the teleconferencing service we used for those seminars.
WebEx Communications - $0.50 and $1 box
Prior to recent events, shares of WebEx (WEBX) had completed a very strong run. Historical analysis of the point/figure chart indicate that the stock had exceeded a bullish vertical count price objective dating back to May of this year of $25. In July, the stock finally started finding sellers outstripping buyers and the first sell signal off the top was generated. That created a bearish price objective of $13. That bearish price objective was invalidated just recently when the point/figure chart gave a double top buy signal at $20. Traders will note that the stock had tested bullish support in early September (blue 9) and began reversing higher PRIOR to recent events. With a current bullish price objective of $36.50, this stock may well be finding buyers. Teleconferencing isn't just used in times of worry regarding air travel. It's a viable alternative and can help corporations control expenditures in the area of corporate travel.
We've seen a lot of selling pressure today in the broader markets and this has dampened many spirits. Earlier losses in some of the U.S. Treasury markets have been reversed today and we've seen some many market participants put their money back into bonds. This may actually be a positive longer-term. Last week we talked about how the foundation of the stock market was based on the belief or confidence in the underlying government. Yesterday we saw a lot of selling in the 10-year and 30-year bonds and today we've actually seen more buying. Yes, stocks are suffering the consequences, but much of today's move in stocks looks to be based more on "panic" that stocks aren't back at their levels of Monday than anything else. Yes, there's economic uncertainty and man investors are just plain scared. Who can blame them.
Last night I was watching the evening news and there are a multitude of "research" pieces that talked about nuclear and chemical warfare and how easy it is for that type of activity to take place here in the U.S. It's very depressing and undoubtedly has some investors painting the picture of economic disaster. Many of these "research" pieces were file footage from 5 and 10- years ago. While I've never been one to say it won't happen, we must remember that much of the news being reported is meant to help inform, but it also has a negative effect.
Traders must continue to try and protect their portfolios where they see fit. We'll all get through this eventually, but hopefully we've given our subscribers some of the tools and strategies to help them.