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STOCHASTIC OSCILL


JNPR Finds Support At Gap

08/28/08 08:57:31 AM
by Arthur Hill

Oversold stochastics and gap support could lead to a bounce for Juniper.

Security:   JNPR
Position:   Hold

On the price chart (Figure 1), Juniper (JNPR) surged above resistance with a big gap in July. This move occurred on high volume as buying pressure expanded considerably. Perhaps more important, the gap held as buyers kept up the pressure over the last few weeks.

The gap turned into support in late July and August. JNPR pulled back with the rest of the market over the last two weeks and is trying to firm near gap support. This represents an important test for the bulls. A strong gap and breakout should hold. Failure to hold and a move below the August lows would be seen as a sign of weakness.

FIGURE 1: JUNIPER, DAILY. JNPR surged above resistance with a gap in July.
Graphic provided by: TeleChart2007.
 
As long as support holds, I am watching the stochastic oscillator for an upturn. This momentum oscillator turned oversold with the move below 20 over the last few days. I would consider it both oversold and bearish as long as it remains below 20. Look for a move above 20 to signal a bounce in the stock. In addition to the stochastic oscillator, I am marking resistance at 26 on the price chart. An upturn in the stochastic oscillator and move above 26 would argue for higher prices in Juniper.



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.

Title: Editor
Company: TDTrader.com
Address: Willem Geetsstraat 17
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Website: www.tdtrader.com
E-mail address: arthurh@tdtrader.com

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