VerticalNet
Inc (NASDAQ: VERT)
Market Call™ for August 18, 2000
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.
Regardless of the direction of the general market, some stocks will move in
the other direction.
We are forming a very nice base here and the NASDAQ is right at its 200 day
moving average.
I do not like to play a hero picking bottoms, but rather wait for a turn.
We are seeing some stocks turn, while others continue to falter.
This may be the case for this example.
Support, Resistance and Breakouts
Think of security prices as a war. It is a battle between a bull (the buyer)
and a bear (the seller). The bulls push prices higher and the bears push
prices lower. A buyer that feels an area has good value will buy at that
level. The seller that feels that a stock has reached fair value will sell
at that higher fair value price. The direction prices actually move reveals
who are winning the battle.
Remember when a trade takes place, a buyer and seller agreed to a price.
There was a buyer and a seller involved in the transaction. The buyer feels
the stock will go up. The seller wants to move on to another stock that he
may feel will appreciate faster.
Support levels are the price where the majority of traders feel the value is
a good buy. Resistance is the level in which the majority of traders feel
prices will move lower.
When the majority of traders and investors change their expectations, these
support and resistance areas get violated and a new trend may be beginning.
This can occur due to changes in expectation of earnings, new product
development, change of personnel, cut backs or expansions.
Let’s look at the VerticalNet (NASDAQ: VERT).
Over the past two weeks, VERT seems to be finding support in the low 40’s.
At the end of the day today, VERT took out the high of the last 5 days
trading, and the highest high in the last 20 bars.
This could be a breakout and the start of a new trend.
As I always mention, not all of these work out, but if we have an unchanged
or up opening in VERT, I would play this break.
If the trade were entered in momentum to the upside, a stop of 1 � points
would be appropriate.
Chart courtesy of
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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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1998-2000 Tulips and Bears LLC.
All Rights Reserved. Republication of this material,
including posting to message boards or news groups,
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Last modified: February 02, 2001
Published By Tulips and Bears
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