Stock Chart SY

Posted by downtowntrader | 3/03/2009 09:42:00 PM | 0 comments »

Stock Chart Analysis SY

Sybase, Inc.(Public, NYSE:SY)

I've mentioned a few times recently how Tech stocks have been showing good relative strength versus the rest of the markets. While they too have succumbed to the recent pullback in the markets, note how the Nasdaq 100 and Composite have yet to make new lows. While this is due in large part to under performance by the Financials, other sectors have fared quite poorly too. In fact, over the past 30 days, the Industrials have performed worse than the Financials, with Utilities and Materials right in the mix. Tech has clearly been the best performer, and could lead on the next rally attempt.

Sybase, Inc. (NYSE:SY), while not in the Nasdaq (it's a member of the Russell 2000), is in the Computer Software and Services sector. It has a very interesting chart that has held up well through the recent market weakness. In analyzing the chart for SY, I see a base that resembles a cup and handle. There is a lot to like in this chart. Notice the high volatility on the left side of the base and how it died down as it began bottoming. As it started to round higher volume started to increase, and there was a nice high volume gap on the right side which may of ignited a new move higher. It is now in the process of consolidating that move in what could be called the handle for the base. Volume has been tapering off as SY pulls back towards its 50-Day moving average and as it fills the prior gap. While technically the buy point would be over the high side of the base (near 200-Day moving average), there could be a low risk opportunity buy point in this area. I am keeping an eye out for signs of a reversal in this area which would allow for a pretty tight stop, with chances for a couple of targets. The first target is a test of the 200-Day moving average, and the second would be on a break of the cup and handle.

Good Trading,