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Friday, August 25, 2006 

LRCX breakdown , GTW , NTAP , Crude Oil

October light sweet crude oil futures closed at $72.51 per barrel on Friday, after rising more than $1 earlier in the session as a storm brewing in the Caribbean threatened to sweep through the U.S. Gulf next week. Prices of Crude Oil are under pressure again not only because the storm but also because the demand in China that rose 12.2 percent in July from a year earlier, the fourth month of double-digit expansion.

Here is a chart of NTAP stock showing the trendline resistance. During this week NTAP failed the breakout the trendline after retested 3 times, and of course now it lost strength to move up and it looks like Full Stochastics will cross back over to the negative.

Shares of GTW increased nearly 35% during this week after a hedge fund disclosed it has accumulated a 10% stake. On Tuesday another event appeared , Lap Shun Hui, owner of Joui International and the former of eMachines, said that he has submitted a bid to buy the retail operations of computer maker Gateway for $450 million. Many reasons in only one week for investors with long positions believe in the stock, and in my opinion they should maintain its long positions, and probably in next few months or even weeks we'll see more short covering due these facts. The stock is now in Overbought conditions and perhaps we'll see some profit taking at these levels, but the next move up could be until the 2.36 area.

On friday afternoon’s the stock breakdown through the support at $40 seemingly put the sellers in further control of the trend and that is why it made sense to favor the short side. During this week the stock headed back up to the descending trendline and have failed the breakout, volume is increasing in the downdays. Keep in mind that the stock is trading in a downtrend, RSI is again in the Bearish area and an important point was that the DMA50 line already crossed DMA200.

That's All. Have a nice weekend and a great trading week !!!


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  • I'm a 48 year old Independent Trader using proprietary technical analysis with more than 20 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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