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August 30, 2005
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This pattern is fairly typically among tech indices and stocks. There was a consolidation in June, a surge in July and a decline in August. The consolidation (gray oval) acts as support and the stock bounced off 34 twice this month. It is possible to draw a trendline extending down from mid July and there is resistance at 35.3 from last week’s high. A move above 35.3 would affirm support, break resistance and argue for further strength.
RKH broke below the lower trendline of a rising wedge and then consolidated (gray oval). Notice that broken support turned into resistance around 137 and this is the level to beat. A doji formed on Monday and the decline over the last two days solidifies resistance. There is support around 133, but I am not expecting it to hold.
Posted by Arthur B. Hill at August 30, 2005 08:43 AM