Agilent Technologies Gaps Into Resistance Zone

07/21/05 08:38:58 AM

by Arthur Hill

Fanline breakouts and a gap spell higher prices for Agilent Technologies (A).

Security: A
Position: Accumulate

For some serious perspective on Agilent Technologies, I will start with the weekly chart going back to March 2000. The stock declined from March 2000 to October 2002 and then formed a double bottom (gray oval). The double-bottom breakout in July 2003 fueled an advance to around $39 by January 2004. The pullback in 2004 returned to broken resistance, and this level (20) became support. This is classic technical analysis. The stock is now getting a strong bounce off support and the upside target is resistance around 39.

Graphic provided by: MetaStock.

Graphic provided by: Reuters Data.

This next chart shows the last 18 months and a resistance breakout appears imminent. First, the stock broke the third of three fanlines with a strong advance in May. Volume perked up (gray arrow) and the move reached the resistance zone around 25-26. Second, the stock gapped higher after a shallow pullback in June. This gap also occurred on good volume and should be considered bullish as long as it is unfilled.

Graphic provided by: MetaStock.

Graphic provided by: Reuters Data.

The stock has yet to clear the 25-26 resistance zone, but I would expect higher prices as long as the early July low holds (24). A move below 24 would fill the gap and erase the July bounce. This would signal a failure and put the stock back into the trading range (20-26). As long as support at 24 holds, I would look for a move toward the January 2004 high around 39.

Arthur Hill

Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.

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Agilent Technologies Gaps Into Resistance Zone

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