Traders in search of some high-odds action may want to look at SIRIUS XM Radio (SIRI), Advanced Micro Devices Inc. (AMD), or Yahoo! Inc. (YHOO) first. Charts of all three stocks are taking an interesting - and perhaps trade worthy - shape today. Here's a closer look at each.
This is actually more of a follow up on the bullish view taken on
SIRIUS XM Radio (
SIRI) from July 31st. At the time, shares were attacking a major resistance line. Since then, they've won.
Though lower today, a more recent support line has materialized (two, actually). The one being tested today may not hold, but as long as the less-steep one holds up, the uptrend will remain intact. (continued below)
The major bullish key, however, is the ceiling around 57 cents. That's been the top (or close to it) several times in the last few months, and needs to be hurdled before getting too excited.
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Though the lows aren't necessarily lower just yet, the highs for
Advanced Micro Devices Inc. (
AMD) have clearly been getting lower for the stock. Most recently, AMD hit a falling resistance line at $3.76, and seemed more than willing to not press higher. As a result, the third node of that resistance line was made.
One could make a good case that there's support at $3.41, and then again at $3.22. We wouldn't argue. If either or both of those lines break down though, a revisit of the $2.00 isn't out of the question.
Almost needless to say, Dell's woes are directly and indirectly AMD's woes... and Dell has plenty of them right now. Add in the mere possibility of so-called 'terrorism ties', and Advanced Micro Devices could fall out of the market's already-tepid favor.
The chart of
Yahoo! Inc. (
YHOO) has a lot going on, the most critical of which is the breakdown of a major support line in July. A brief recovery was made later in the month with the move to the $17 area, but that ended up being the nail in the coffin.... a window of profit-taking opportunity for those who didn't get out before July.
Related, though it's not a perfect example, July's last-gasp blowoff top also made what's called in 'island reversal'. (continued below)
An island on a chart is just a cluster of bars that begins and ends with opposing gaps. In YHOO's case, the bullish gap from July 17th and the bearish gap from July 29th left the trades in between 'stranded' on the chart. Normally traders expect gaps to be filled, but this particular formation suggests a strong and decisive reversal of the prior uptrend.
A move under support at $14.20 would likely clinch a pullback. By the way, the $14.20 area is also close to a major Fibonacci retracement level. Since they're in play, that makes a move to $12.29 or so a good starting target.
If you'd like to know of any changes in our opinion of these four stocks (or if we officially recommend them as trades), be sure to sign up for free newsletter today. It's delivered 2 to 3 times per week.
