An
InvestorLinks article
distributed every market day.
America
Online (NYSE: AOL)
Market Call™ for October 1, 1999
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.
Focus on Exit; Take what the market gives you, the market is always
right.
Many of the Internet stocks have rebounded recently. Rumors abound about
mergers, deals and other combinations that have stirred recent price moves.
We know what support and resistance looks like and can draw trend line
across these key areas.
We have seen how a tool like moving average crossovers can help keep you in
a trend.
Let's look an exit strategy using America Online (NYSE: AOL).
On September 21, 1999, AOL broke a short-term resistance and moved higher.
This move was also confirmed by crossing moving averages that you see daily
in this column.
I am now seeing some warning signals and I would be ready to exit and
possibly enter a short position in AOL.
>From the chart below, you could draw a trend line across the lows from
September 20 and 23. A resistance line can be drawn at 112.
I am concerned with the action in the MACD, Momentum and OBV indicators.
The MACD and Momentum indicators have lower highs and lower lows. OBV seems
to be rolling over.
The risk vs. reward seems low here and a break below 104 would really spell
trouble for the stock.
I would exit AOL at 104 if it breaks below that point. If it turns around
from here and goes up, then stay in the stock.
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.
Copyright �
1998-2000 Tulips and Bears LLC.
All Rights Reserved. Republication of this material,
including posting to message boards or news groups,
without the prior written consent of Tulips and Bears LLC
is strictly prohibited.
Last modified: March 17, 2001
Published By Tulips and Bears
LLC
