TELECOMS DOMINATE N.Y.S.E. MOST ACTIVES LIST - LUCENT CHALLENGING KEY RESISTANCE
ALCATEL SPARKS TELECOM RALLY... Telecom stocks: ALA, LU, and NT are dominating today's N.Y.S.E. most actives list. Alcatel (ALA) is leading the group higher with double-digit intra-day gains. ALA gapped above its December peak resistance this morning and is currently trading above its 200-day moving average. A close above this level would be bullish. The RSI line (above chart) is trending upward and the MACD histogram (below chart) is in positive territory. Nortel is strong today and appears poised to complete a moving average golden cross (see shaded circle), which is positive. [A golden cross occurs when a rising 50-day moving averages crosses above a declining 200-day moving average.]
Chart 1
Chart 2
LUCENT CHALLENGING RESISTANCE... Lucent (LU) is challenging its 200-day moving average and prior peak resistance levels. This area near $2 is critical since a break above this level (on a closing basis accompanied by higher volume), would complete an inverse head and shoulder pattern that has been forming since August (see shaded area). [Note: Breakouts from inverse head and shoulder patterns must be accompanied by increasing volume if breakout is for real and not a fake out.] The RSI (above chart) is trending up and the MACD histogram (below chart) is positive. More later...
Chart 3
