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Play of the Day (For Thursday)
Interactive Chart
Wednesday, March 21, 2001

SIAL - Sigma-Aldrich $45.88 +0.44 (+2.50)

Tuesday's Comment:

Specialty-chemical manufacturer Sigma-Aldrich bucked the overall market trend to move higher today, as some traders continue to look for any semblance of safety on the long side of the market. What's more, Tuesday marked the third- consecutive day that SIAL made for higher ground. Today's move came on better-than-average volume of 915,000 shares; nearly double the three-month average of 525,000, so there was some conviction behind the buying. With the recent rally, SIAL has caught support at what appears to be a consolidation base at $43.00, which should be bolstered by the 10-dma at $45.08. Above, SIAL has immediate resistance at the March 9 intra-day high of $46.06 followed by today's intra-day high of $47.50. With the MACD set to turn positive, we wouldn't be surprised if SIAL takes out immediate resistance sooner rather than latter. With that said, traders interested in taking a position in SIAL could consider an entry point on a move through the March 9 high of $46.06 on 300,000 shares traded by noon. Should SIAL fall apart, however, we will limit our losses with a stop-loss just below the 40-dma at $42.25

Wednesday's Update:

Make it four days in a row for our relatively new play. As the market tanks, SIAL keeps heading for new highs. We can't wait to see what the stock will do on a strong day in the markets! Today's strong move against the overall prevailing downtrend was backed by volume that came in greater than two- times the stock's three-month average of 525,000 shares. With the move higher, SIAL's MACD is about to roll positive and its OBV has just reached new highs. The stock closed just shy of its 3/9/01 high of $46.13, but if volume keeps trending higher along with OBV, this obstacle should be a thing of the past very soon. As mentioned, near term resistance for SIAL comes in at $46.13 and support remains intact at $44, the bottom of the stock's recent cup formation. Traders can look towards a break and close above $46.13 on volume of at least 600,000 shares traded by day end as the best risk/reward entry point into this stock. In addition, a pullback to $44 on lighter volume (less than 400,000 shares) with a subsequent bounce would also make a good, low-risk entry point. We are keeping our stops firm at $42.25 in case the stock changes course.

Picked March 20th @ $45.44
Change since picked +0.44
Stop Loss @ $42.25 

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