Reader request: Stock Chart S

Posted by downtowntrader | 6/04/2009 11:43:00 PM View Comments

Stock Chart Analysis S

Sprint Nextel Corporation(Public, NYSE:S)

Here is a look at Sprint Nextel Corporation via a reader request. S is at an interesting point here, as it has pulled back to obvious support and is oversold enough that a bounce here could be expected. S had a prior line of resistance around $4.50 that should act as support if tested. It also has a gap that hasn't been filled near $4.70 that should also act as a layer of support. Beyond these horizontal levels of importance, S is also sitting on a rising trendline that has defined the existing rally just as the slow stochastics indicator is becoming oversold. These are all signs that S could get a bounce off these levels.

However, S is also showing many signs that the current rally off the November lows is getting long in the tooth. The RSI indicator has not confirmed the recent highs with similar highs in the indicator, and the MACD histogram is even worse. It is making new lows, which implies that downside momentum is picking up speed. The $6.00 area is a key resistance level, and may not be easy to break.

In my opinion, the key levels to watch are the gap support and $6. Much depends on a traders timeframe, but breaking under the rising trendline and gap should change the trend to sideways at a minimum. A move over $6 has to be treated as bullish.

Good Trading,


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