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McMillan: Technical trading talk Print E-mail Digg It!
Tuesday, 06 May 2008

 "The major market indices have pulled back, sector leadership remains positive and the bulk of our technical indicators remain bullish," says Larry McMillan in The Option Strategist.

"The market has been weak in the wake of the termination of the Microsoft-Yahoo takeover attempt; and also in part due to a sharp recovery in the Energy futures markets.

"The financial sector has tested its breakout level while the technology sector remains above its recent support -- Microsoft-Yahoo news notwithstanding – and the energy sector has recovered strongly following last week’s pull-back.

"Therefore, with these key sectors all still trading in uptrends, we continue to remain positive with regards to an eventual move by S&P 500 to the 1440-1450. A break in these positive trends would cause us to re-evaluate this view, however.

"Market breadth measures have continued to improve; and this is positive when it accompanies rising prices as it indicates that the rally is attracting buying interest. Therefore, market breadth is currently overbought but bullish.

"Some market pull-backs can be expected to alleviate this current overbought condition. However, as long as the bullish trend remains in place, we would regard such pull-backs as buying opportunities as opposed to new short-sale opportunities.

"Meanwhile, the signals that the computer can 'see' but the naked eye might not, include new Buy signals in the China Life (NYSE: LFC), Nabors Industries (NYSE: NBR) and Verizon (NYSE: VZ)."



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