DELL LEADS TECHNOLOGY BOUNCE -- QUALCOMM IS FALLING
DELL BOUNCES OFF SUPPORT ON VOLUME... Some good news out of Dell Computer is prompting some heavy buying today. Chart 1 shows the stock gapping higher on rising volume (DELL is the most actively-traded Nasdaq stock today). The 14-day RSI oscillator appears to have bottomed near 30. In addition, the daily MACD lines have turned positive. The (green) relative strength line is also rising vs. the S&P 500. Chart 2 also shows that DELL has reached an important support area along the lows of last summer. It's important that the stock hold in this area to maintain its 16-month trading range between resistance over 30 and support in the low 20's.
Chart 1
Chart 2
ADI, LLTC, AND NVDS ALSO LEAD TECH BOUNCE... Three other Nasdaq leaders are shown below. Analog Devices and Linear Technology show similar chart patterns. Both have retraced two-thirds of their rallies off the October bottom and are finding support along their December lows. Both are trying to climb back over their 50-day averages. And, their price relative lines show good relative strength versus the Nasdaq. Of the two, however, Analog is attracting more volume. Nvidia is gapping higher on very strong volume. Its relative strength line is also turning up.
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QUALCOMM IS FALLING... Qualcomm is one of the bigger Nasdaq stocks that's having a tough time. The stock fell to a three-month low yesterday (on very heavy volume) and is now threatening its 200-day moving average. QCOM has been trading under its (blue) 50-day average for over a month -- giving a much earlier signal of a downturn.
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WHILE TECHNOLOGY IS THE STRONGEST SECTOR, HOSPITALS AND PAPERS ARE THE DAY'S WEAKEST GROUPS. MORE ON THAT LATER....
