The Nasdaq Composite (^IXIC) is now within five points of the recent multi-year closing high from January 12. The intraday high that was achieved on January 16 is at 2508.93.

A decisive breakout of the range that this index has been in since mid-November, as discussed earlier this week, could provide further underpinning for the overall bullish tone to the market and in turn help to propel the S&P 500 towards its old historic high from 2000.

The daily chart for Russell 2000 (^RUT) shows a combination inside day/spinning top formation.

Earlier this week we discussed the cup and handle pattern that was evident on the chart for the banking sector (^BKX). The breakout implications have been reinforced with the price action over the last three sessions but yesterday’s small Doji candlestick may be pointing to near term directional uncertainty.







TRADE OPPORTUNITIES/SETUPS FOR FRIDAY FEBRUARY 16, 2007

The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session.

News Corporation (NWS) has consecutive tiny range Doji candlesticks and there is deterioration taking place in the volume and money flow characteristics.



BEA Systems (BEAS) has been trading within a very narrow range since the beginning of the year but there is evidence of accumulation during this basing period. Yesterday's move up to the top of the channel was on above average volume but there could be hesitation as the stock needs to cross the hurdle of the 200-day EMA as well.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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