The post on ZRAN i mentioned yesterday. (some people asked for it)
Zoran: Interesting support possible, not guaranteed
Not to be dramatic, but Zoran's technical position is fascinating.
Ziv Segal 19 Dec 02 13:11
Like the New York indices, the Israeli shares I cover in this column suffer from a wiping out of their most recent rise. For some shares, like Check Point (Nasdaq: CHKP), the effect is not dramatic. Check Point has traded within a horizontal sleeve for a long while, with clear support and resistance levels. The share’s recent rise did not escape this sleeve. Check Point’s rise was therefore not considered a change in trend, and its return to the bottom section of the horizontal sleeve is not terribly unusual. Incidentally, Check Point’s support can be tested around $13; it is likely to lead to a positive turnaround and another surge in the share. The support should be carefully checked, since the share is still under heavy pressure.
The reason I chose to cover Zoran this week is the dramatic character of the trading in the share (compared with Check Point and other shares) in the past month, and the fact that Zoran is in an fascinating technical position.
I’ll start with the share chart. The share’s recent rise broke through a falling trend line, a long-term bullish signal. This surge, however, which reached exactly $24, restored precisely 62% of the preceding decline, and no more. According to Fibonacci technical analysis, this means that the rise was no more than a correction. From $24, Zoran fell again, reaching the no less interesting support level of $15. The last decline offset exactly 62% of the preceding rise, and should also probably be classified as a correction, provided Zoran is supported above $15. If that occurs, and Zoran begins to rise above $15, the chance for a long-term rising trend will be renewed, implying another attempt to break through the $24 resistance level.
Since Zoran also has a horizontal support level at $15, it is worthwhile following the share at this level. Since Zoran reached $15 on Wednesday, support there still cannot be assumed; waiting is required to confirm it. A move above $16.50 will be considered a reasonable confirmation of support and an upward turnabout.
The conclusion is that Zoran is worthwhile following at $15. When signs of support there emerge (assuming that they do indeed emerge), buying above $15 can be attempted, with a hedging sell order below $15. If Zoran fall below $15, it will indicate a chance of a substantial drop in the share.
This review was written before the opening of Thursday trading in New York.
Published by Globes [online] - www.globes.co.il - on December 19, 2002
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