2006/10/15 AMKR TA

Challenges for AMKR

When I look at a stock, I look for volume patterns, swing points, and price action. I like to have a MACD confirmation, as well. Based on these factors, here's what I'll be watching in the next few sessions.

AMKR has now created a fresh swing at 7.40 and did that on 7.8mil shares. It couldn't get near that on Friday with the much lighter volume of 3.4mil shares. Getting above 7.40 on better than 7.8mil shares is going to be tough. My guess is that it won't make it on the first try because it won't have the volume. By that I mean that if it pokes its head above 7.40 on lighter volume, then it will pull back. But then taking out the new lighter volume swing will be easier. So that's the set up I see for the first few sessions in the week ahead.

Once it gets through this 7.40 area then there are a couple of swing highs from 7/19 & 7/20 that have to be dealt with. Those prices are 7.54 & 7.56. The volume on the more important 7.56 swing was 5.8mil and to get above that AMKR should do at least that much volume, if not better. It will be key on the day that AMKR breaks above 7.56 for a close to happen above 7.56. On 7/20 AMKR opened at 7.33, then went to 7.56. It appeared that it was trying to break out of the downtrend. But that move failed and it closed at the low confirming that the downtrend was still in place. Like wise, a close above 7.56 will confirm not just that the uptrend is in place but the strength of the uptrend.

Once it gets above 7.56, the next important swing is at 7.80 on 7/26. AMKR looked like it was fighting for its life there. There was huge volume, 10.5mil shares, and AMKR even closed near its high. But the next day it got slammed down and that was when the consolidation started. A break above 7.80 will not only confirm that the consolidation is over for now, but will also be an important break of the 200 DMA. But, again, it will either have to get above 7.80 on better than 10.5mil shares or it will have to make a couple of tries at that area.

Once AMKR gets above 7.80 confirming that the uptrend is in place, I will be watching for a blow-off top and here's why. At some point AMKR is going to have to go back and fill that big gap from 10/9. For some reason stocks just seem to do that. It doesn't always happen and AMKR may not fall prey to this phenomenom but chances are that it will. The good news is that once it comes back and fills that gap, it will be ready for the next move up and so should be a buying op.

So that's my take, for what it's worth. I am long at $5.47. I will jump ship as soon as I detect weakness.