Name:Check Point (Nasdaq: CHKP)
Last price: $122.44
Support to watch: $100
Resistance to watch: $125
Chart courtesy of Stockcharts.com
Check Point (Nasdaq: CHKP) is still probably considered every Nasdaq investor’s dream stock. It is only 30% below its all-time high, and its graph looks much better than Nasdaq’s from a bullish standpoint. The last time we reviewed the share in this column, the headline was, “From investors to traders.” At the time (a month ago), the share stood at $104. Since then, it rose to $160, then fell to its present level – a nice round trip for those who climbed aboard soon enough.
This strategy is not changing, and for the time being a long-term investment in the share is pointless. Furthermore, it appears that further declines should be taken into account, both in the short and even in the longer term. The test will be in the neighborhood of $125.
The share closed below this level yesterday. The closing price was the same as at opening, flowing a day of fluctuations. The identical opening and closing prices indicate a certain consensus on this price. If the share does remain below $125, particularly if it remains below $124, it will thereby signal resistance at this level and potential for additional falls. The nearest target is likely to be once again at $100, but this target will probably be only an intermediate one.
A rise above $125 and support at this level will constitute a bullish signal, but will be insufficient to break the pattern of decline. For this pattern to alter, the share will have to rise above $150 and stay there.
The bottom line is that buying at $122 is not worthwhile (it is better to sell at this level). Short-term purchases should be made above $125 (with support signs) or at around $100 (also based on support signs).
Published by Israel's Business Arena on December 21, 2000