Avant
Corporation (NASDAQ: AVNT)
Market Call™ for January 30, 2001
Contributed by Mark Seleznov, TrendTrader.com.
The purpose of this Market Call section is to
educate readers in technical analysis patterns and indicators. As with all investment
information, you need to research information and consult your financial advisor before
initiating any strategies that are contained in Market Call.
Also, you must realize that as with all trading strategies,
opinions can change quickly depending on market conditions and developments.
This column tries to present historical examples, potential set
ups, and examples of entry and exit strategies.
Third Times a Charm
Three! It is often a highly intriguing number in technical analysis; most
often in terms of support and resistance. Many technicians believe stocks
that can test support three times without violating that support will then
retrace to the upside away from the support level, and vice versa for stocks
failing to go through resistance. On the support (down) side this is known
as a triple bottom; on the resistance (up) side this is known as a triple
top.
A good example of a triple bottom occurred in INTC (December 29th 2000,
January 3rd, 2001, and January 17th 2001). On all three days Intel tested
the $30 support level but never traded through. Since the third test of the
$30 support, Intel has retraced back up seven points, it’s highest level in
over a month.
So what happens if we actually get a break through support or resistance?
Often a break on the third effort results in the largest percentage moves
since many technicians are looking for triple tops and bottoms, or in this
case, a break out resulting from the third testing of support or resistance.
Now let’s look at
AVNT.
AVNT had a strong move from 17 � to 27 before retracing below 21 �. Prior
to today AVNT had two tests of the 24 � level on January 24th and 25th.
Today the stock broke the level with a strong effort at the end of the day.
I would buy AVNT at any point now and put a stop in at 23 7/8.
If the move continues Tuesday morning beyond $25, the $24� level should
provide as new support and may be a good place to move the stop to 24 3/8.
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Call Information
Mark A. Seleznov is a General
Securities Principal and Managing Partner of Trend Trader, LLC, a NASD, SIPC broker/dealer firm located in
Scottsdale, Arizona. A professional trader for over 25 years, Mark was a Market Maker on
the Philadelphia Stock Exchange, a Retail Registered Representative, and futures trader.
Mark is an author and recognized expert in equity Day Trading. He conducts seminars in
Equity Day Trading and offers his firm traders training and support. If his firm holds any
positions in the public companies he writes about, it will be noted at the bottom of his
article.
Market Calls is a daily syndicated column on trading by Mark A. Seleznov, Managing Partner
of Trend Trader,
LLC. For information on obtaining Market Calls for your web site,
newspapers, or publication, contact Trend Trader, LLC at 602-948-1146
Disclaimer: Trading in securities may not be suitable for
all individuals. Consult your broker or other professional to determine your suitability.
This is not an offer to buy or sell securities. The advice given above is of a general
nature and should not be taken as a recommendation to buy or sell the referenced security.
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Last modified: January 29, 2001
Published By Tulips and Bears
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