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12/09/98 Lucent Technologies (LU) Points to watch: Watch Lucent in the coming days for further confirmation of the double top (A,B on chart) that is forming before taking any action on the stock. Underlying technicals suggest the stock will not break out to new highs. Daily RSI has shown a particularly strong divergence with price during the past week's rally, and has shown divergences since early November. Weekly RSI and daily stochastics have also shown divergences with price since early November. Money Flow and OBV have shown strong divergences with price since the rally in Lucent shares began in early October. The strongest case against LU making new highs is the extent of the decline it experienced. During the October lows Lucent's decline was stopped at the Fibonacci 62% retracement level. Generally when stock's retrace over 50% of their previous rally any subsequent rallies end in either failed Wave 5's or double tops. |
