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8/20/99 MCI WorldCom (WCOM)
Points to watch: WCOM's
chart continues to look bearish, and it is unlikely that the stock has
made a final bottom yet. The double top that had been forming (with
peaks on April 27th and June 21st) was confirmed on August 9th when the
stock fell below its April 30th low of 80.43. The topping formation
is given added strength by the multiple divergences that occurred during
the June high, with daily OBV and weekly MACD and RSI all showing strong
negative divergences with price during the peak. After peaking in
June, the stock entered a steep decline, and fell below its 200 day moving
average on August 9th. The stock then made a feeble rally attempt from
8/10-8/16 which met resistance at the 200 day M.A., just below the 4/30
low. The stock resumed its decline after hitting resistance, and
closed yesterday at 75.75. We would sell, or short the stock if it
breaks below the 8/10 low of 73.31 in the coming days.
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