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Ask Tony
Wednesday, April 11 th, 2007
by Tony Golan
Chief Technical Analyst
StockProfit.com™
Question:
I'm looking for a resumed run on CEGE, considering July 10 calls. Does this make any sense?
Also when might Sun Micro burst a bit to at least 7 ish...longer term 10 a share timeline?
Matthew
 Zoom
Tony answers: Matthew, as you can tell from the chart above, CEGE was below the 200-day moving average until just recently, then gapped-up and rallied to a high of 7.30 yesterday. Today, it finally pulled back, and was down with a small black candlestick and made a lower high and a lower low than on the previous day. To resume the rally, the stock would have to cross above the high of the previous day at least, so to get into it you would want to trail a buy-stop aboe the high of the previous day. Therefore, if today's high was 5.62, you'd place a buy-stop @5.64. If the next day the stock would only make a high of 5.25, you'd then move down your buy-stop to 5.27 and so on, until you get triggered into it. I am not a proponent of options trading, so I can't answer as to how to take advantage of such moves with options.
Zoom
As for SUNW, there's no telling when it will get to 7 or to 10, or whether it will get there at all. RSD has been staying below 25 even though this is a low-priced stock and it is in an up-trend, which is not a good sign. Also, SUNW has been making lower highs and lower lows for the past two months, which puts it at an intermediate-term down-trend.
-Tony.
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Tony Golan
Chief Technical Analyst
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