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inthemoneystock (< 20)

Shake That Tail



August 03, 2011 – Comments (1) | RELATED TICKERS: RAX , RVBD.DL , SNDK.DL

This morning, the sky was falling as the major stock indexes plummeted, however, after a heavy volume surge after the open the major stock indexes started to recover a bit off the lows. At one point, the Dow Jones Industrial Average(DJIA) was down by more than 150.00 points before bouncing higher. This afternoon, the DJIA is trading lower by just 20.00 points. The big question is whether this market can hold up into the closing bell. Traders should always remember the old market adage, it is not how the market starts, it only matters how the markets finish.

There are many stocks that are making potential bottoming tails on the charts. Leading stocks such as Rackspace Hosting Inc.(NYSE:RAX) has reversed its earlier declines and is now trading positive by 0.53 cents to $39.53 a share. VMWare Inc.(NYSE:VMW) also reversed higher and could be making a potential bottoming tail on the daily chart. These are leading stocks and that is why they must be followed closely. Other stock that have rallied sharply off of the morning lows include Sandisk Corp.(NASDAQ:SNDK) and Riverbed Technology Inc.(NASDAQ:RVBD).

When stocks rally off of the early morning lows this sharply it will often signal a possible near term bounce. It is still very important for stocks to see follow through in the coming days should they even hold up into the close. Tomorrow many traders and investors will be in pause mode ahead of the U.S. government job report on Friday morning. In the meantime, there are a lot of potential bottoming tails to look at on the charts.

Nicholas Santiago

1 Comments – Post Your Own

#1) On August 03, 2011 at 4:05 PM, davejh23 (< 20) wrote:

It's tempting to buy in now as stocks look oversold short term, but who knows what happens if the initial claims and July unemployment reports come in terrible?  The employment data we've seen so far is consistent with a negative jobs number and a rising unemployment rate.  It seems likely that any bounce here will be short lived.

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