Silicon Graphics (SGI)

[livermore4ever]

SGI: Technical Analysis (05/Aug/2004)

Hi ! Before you read this, you should take a look at my SGI Technical Charts, in order to understand this analysis:

http://globalspeculators.com/trading_futures/index.php?topic=14.0

Long Term Overview:
SGI is trading a lateral-triangular pattern for the long run, having 4 higher lows and 3 lower lows since 2001.
On the downside we have an ascending long term support, which has been tested last week (low of the year), in the other hand the upside resistance was tested in February (high of the year).
The contact with the support level has generated a first positive reaction, which is bullish.

Short and Medium Term Overview:
This time frame is bearish since last February…
The long term support test was on the $1.27 level, but the main reference for the last months is the $1.50 level, which can be considered a support for the next sessions ($1,50 level was a resistance during late 2003 and was a support level on May, making this number an important trading orientation)

There are several patterns running on this time-frames:
- A slim descending channel since late June
- A downside projection given in July, that has already been achieved on the lows
- An upside resistance on the $1.72 level
- A moving average bearish signal given on July.
- A buying signal given with the DMI (Dynamic Momentum Index) indicator

This situation can make a little confusion for the short run, but it’s possible to make a sort of trading plan using this clues…

Resuming:
Let’s keep the big picture in mind, and remember that we just had an important contact with the main long term support which is working since 2001…
This reference is now on the $1.28 level, and it’s possible that it will be tested again in the short term… this event can be interpreted as a Buying opportunity with the first short term target on the $1.72 resistance level.
In the other hand, a downside breakout of $1,28 would be very bearish, and will invalidate all the long term pattern.

To change the short and medium term trend, we need a confirmation with a close above $1.72, this may open the road to the long term resistance…

Jesse Livermore