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Stocks move into positive territory

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Stocks have started to move back into positive territory after President Bush addressed the media saying he is urging congress to come in with some tax cuts or tax relief as outlined to further try and stimulate the economy.

People Soft Chart -

It can be amazing to some how just a little bit of support and a splash of positive news can get a bear off his bar stool and head to the floor. Volume has been light on the rally, so you get the feeling that market makers are looking for some type of level before they start getting too aggressive on the sell side for PSFT. Risk for a market maker trying to short to the market is at $30.37. Those that got inventory back to the bullish side in the $17.62-$24 range will most likely start firming up offers at the 200-pd MA on the 60-minute chart at $26.86. If they get some "buy side" order flow at that point (increasing volume) then we could see a move to $30.37 in the next couple of sessions. We'll need to see some volume though in order to get there! Traders that established 1/4 or 1/2 positions earlier may want to wait for a break above the $27 before adding to that position. Use some breaking of a level of resistance before adding to a position. Make the stock prove itself.

Have a great weekend!

Jeff Bailey
Senior Market Technician

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