Saturday, December 09, 2006

MOT..Pulling Back TO Test Support


Looking at the above chart we have a 5 year weekly chart of MOT.. Notice how the stock has been in a 4 year channel. This channel has been tested many times and each time the stock bounced off the channel lines. Since Early October MOT has been selling off making one wonder if this is a pullback to buy or the beginning of a downtrend.. I'ts hard to say exactly because nobody knows for sure what will happen but I am leaning towards the bearish side for the following reasons.. First of all, notice the heavy volume that is coming into the stock on this last move down.. I consider that bearish.. MOT has been selling off since October in the face of a rising market..If a stock can't rally with the overall market, that is a sign of weakness.. If you look at the high that was made last October, you will see that it fell short of the channel.. Usually when a stock fails to touch the top of a rising channel, that is a sign that the stock is losing upward momentum and that the lower channel line will be broken.. Support is in the $20.00 to $20.50 area.. As long as that zone holds, the trend is still up... however if that area is taken out, I think Motorola's trend will have changed to the downside.

2 comments:

Peter said...

nice work on your charts!

Kevin said...

Thanks

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