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| 7/12/99 Compaq Computer (CPQ)
Points to watch: CPQ bears watching this week. Compaq broke above its 55 day moving average (23.83) last Wednesday and finished the weak on a strong note. The stock closed Friday at 26.75 after touching but failing to break through resistance at 27 intraday. The stock also failed to move above the resistance at 27 during an intraday attempt on May 11th. Additional upside resistance exists at 27.7 (the 200 day moving average) and 28.13 (the 62% retracement of the 10/8/98-1/27/99 rally). Technical indicators continue to strengthen, supporting a move to higher levels. Daily Money Flow and OBV both showed strong divergences with price during the June 17th bottom, and both indicators continue to make new highs. Weekly stochastics has given a buy signal, and the daily MACD signal line has moved up to 0. A move by the stock above resistance at 28.13, and a corresponding move by the MACD signal line above 0, would give a strong buy signal.
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