TLAB (Tellabs, Inc.) at 4.48 Broke out of the 5-month Wedge Pattern (BUY)

TLAB broke out of a 5-month wedge pattern following the new YTD low at 3.67 (23 Aug). The bullish MACD studies on the daily chart suggest that scope remains for further near-term strength towards 4.68 (Resistance 1). A sustained break there would allow bulls to target 5.47 (Resistance 2) near 50% retracement of the 7.31 (13 Jan 2011 high)/3.67 decline ahead of 5.80 (Resistance 3) near 61.8% retracement.

However, a breakdown below 3.91 (Support 1) would negate and re-open the 3.69/3.67 key support zone (Support 2). A clean loss there would initiate the next leg-down towards 3.52 then 3.10 (03 Mar 2009/10 Oct 2008 lows, Support 3 zone).

Trading Indication:
Short-term (Intraday): Buy at 4.00 or lower;
Target at 4.68 and higher; Stop Loss at 3.90 (2.5%)
Long-term: Possibly sell higher

GS (Goldman Sachs) at 107.01 Forming a Bullish Outside Week Candle (BUY)

GS posted a new YTD low at 99.78 (12 Sep) while sliding within a multi-week falling wedge. The reversal off the new low formed a bullish outside weekly candle (as of 16 Sep). The oversold weekly RSI shifting upwards indicates that scope remains for further recovery towards 118.10 (Resistance 1). An upside break there would shift the medium-term focus, promoting further recovery towards 129.50 (Resistance 2) ahead of 139.25 (Resistance 3) near 50% retracement of the 175.34/99.78 decline.

However, a breakdown below 99.78 (Support 1) would negate and initiate the next leg-down towards 92.55 (Support 2) then 79.27 (Support 3) near 76.4% retracement of the 47.41/193.60 rally.

Trading Indication:
Short-term (Intraday):
Buy at 102.0 or lower;
Target at 129.50 and higher; Stop Loss at 99.75 (2.25%)
Long-term: Possibly sell higher

MS (Morgan Stanley.) at 15.49 Forming a Wedge Pattern While Seeking a Bottom (BUY)

MS posted a new YTD low at 14.71 (12 Sep) while sliding within a multi-week wedge. The potential bullish divergence of RSI studies on the daily chart (from 08 Aug/12 Sep lows) suggests that a near-term bottom cannot be ruled out. A break above 16.40 (Resistance 1). near the upper bounds of the wedge would neutralize the immediate weakness, promoting further recovery towards 17.73 (Resistance 2) ahead of 18.89 (Resistance 3).

However, a breakdown below 14.71 (Support 1) would negate and initiate the next leg-down towards 13.83 then 13.10 (21/20 Jan 2009 lows, Support 2/3).

Trading Indication:
Short-term (Intraday):
Buy at 14.90 or lower;
Target at 17.73 and higher; Stop Loss at 14.70 (1.7%)
Long-term: Possibly sell higher

DAG (DB Agricultural Double Long ETN.) at 15.15 Pulling Back to Retest the Breakout of the Bullish Pennant Pattern (BUY)

DAG broke out of a six-month bullish pennant formation (from 04 Mar high/15 March low) to reach 16.49 (31 Aug high) before consolidation took hold. The current pullback is anticipated to form a higher swing low near the falling trendline support (from 04 Mar/04/25 Apr highs, former pennant resistance) at 14.34 where bulls may reassert ahead of a return through 15.32 (12 Sep high, Resistance 1). An upside break there would stage 15.77 (Resistance 2) then 16.49 (Resistance 3). Further strength would allow bulls to seek the 16.93 YTD high (10 Feb, Resistance 4).

However, a break below 14.34 would negate and expose 13.82 (19 Aug low, Support 1) then 12.89 (09 Aug higher low, Support 2). Further weakness below would risk a deeper setback towards 12.05 (30 Jun low, Support 3) for a potential retest.

Trading Indication:
Short-term (Intraday):
Buy at 14.35 or lower;
Target at 15.77 and higher; Stop Loss at 14.10 (1.7%)
Long-term: Possibly sell higher

YHOO (Yahoo.) at 14.46 FORMING A POTENTIAL SWING HIGH AT MAJOR RESISTANCE (SELL)

YHOO rebounded from the YTD low at 11.09 (08 Aug) to break above the 3-1/2-month falling trendline (from 09 May/08 Jul/17 Aug highs), retracing over 38.3% of the 18.84/11.09 decline. The positive momentum suggests that further corrective strength is possible towards the major resistance zone from 15.41 (26 Jan low), 15.63 (16 May low) to 15.95 (07 Jul lower high) near 61.8% retracement of the retracement (Resistance 1) where bears may reassert to form a potential swing high. A downside reversal would target 12.45 (Support 1) which, if breached, would open 11.88 (Support 2) ahead of 11.09 for a potential retest (Support 3). However, a break above the 15.41/15.95 major resistance zone would negate the bearish scenario and allow bulls to seek 16.99 next which guards the 18.84 YTD high.

Trading Indication:
Short-term (Intraday):
Sell at 15.70 or higher;
Target at 12.45 and lower; Stop Loss at 16.00 (2.0%)
Long-term: Possibly buy lower

CSCO (Cisco.) at 16.21 Breaking Above Reverse Head-and-Shoulders Bottoming Pattern (BUY)

CSCO broke above the 3-1/2-month reverse head-and-shoulders resistance (from 31 May/21 Jul/11 Aug highs). The positive daily MACD studies suggest that there is scope for further strength towards 16.82 (31 May high, Resistance 1).) then 17.99 (11 May high, Resistance 2) near 50% retracement of the 22.34/13.30 seven-month decline. An upside break there would allow bulls to seek 19.70 near the head-and-shoulder target at 19.30 (Resistance 3).

However, a break below 15.41 (07 Sept low, Support 1) would expose the right shoulder support at 14.90 (19 Aug low, Support 2). Further weakness below would risk a deeper setback towards 13.30 (09 Aug 2011 YTD low, Support 3).

Trading Indication:
Short-term (Intraday):
Buy at 15.20 or lower;
Target at 17.99 and higher; Stop Loss at 14.90 (2.0%)
Long-term: Possibly sell higher
 

NVDA (Nvidia Corp.) at 14.25 Breaking Out of A Bullish Wedge and 6-month Bear Trendline (BUY)

NVDA broke out of the 5-week bullish wedge pattern (02 Aug high/08 Aug low) which converges with the 6-month bear trendline (from 17 Feb/31 May/01 Jun highs). The breakout confirmed the bullish RSI divergence formed from the 08 Aug to 19 August 2011 lows on the daily chart. While the wedge support (from 02/12 Aug highs) holds, there is scope for bulls to re-open the 15.36 lower high (02 Aug, Resistance 1). Clearance above would extend gains towards 16.26 (05 Jul high, Resistance 2) ahead of 19.96 (01 Jun lower high, Resistance 3). However, a break below 12.38 (06 Sept low) (Support 1) would expose the key 11.65 low (19 Aug YTD low, Support 2) near the wedge support. Sustained weakness below would initiate the next down leg towards 10.36 (07 Oct 2010 low, Support 3).

Trading Indication:
Short-term (Intraday):
Buy at 13.25 or lower;
Target at 16.26 and higher; Stop Loss at 13.00 (2.0%)
Long-term: Possibly sell higher