“Firmly committed to Mudd.” Immediately following Wednesday’s close, Fannie (FNM) board members stated their support for the CEO following a sweeping managerial ouster at the GSE. What’s that have to do with tonight’s market snapshot of the charting tea leaves? Well, not much other than bulls and bears are dealing with an awful sort of stick in the mud as it relates to the broader market.

Entering Thursday, I don’t expect conditions to become better suited for either bears or bulls as already anemic volume makes playing the directional game a bit more difficult to appreciate than usual. Additionally, with one too many attractive-looking set ups becoming, umm setups and Elliott Wave stressing a potential EW4 top in the S&P500 ETF—caution is stressed by any would-be bulls.

Nonetheless, my more optimistic side is going to prevail in detailing a couple situations within the leading NASDAQ. While that index attempts to “handle” what’s been an ornery bull market of late, tonight’s piece will take a look at what components Autodesk (ADSK) and Websense (WBSN) are doing and how their continued technical health could aid bulls collective efforts at reclaiming upside milestones of notice.

Figure 1: Autodesk (ADSK) Daily

While I may not utilize Autodesk’s (ADSK) software directly, some things are just cool and to which the Peter Lynch appeal of investing isn’t lost. Shown above, the CAD and graphics giant recently posted better-than-expected results, which decidedly won the affections of bulls and possibly a few positioned and nay saying bears back in mid August.

Admittedly, the daily image isn’t nearly as amazing as viewing “Maya” and other CG-related imagery hard at work on youtube.com. However, traders might be inspired by the cup or “W” structure being carved out over the last couple months. More recent, since breaking above mid pivot resistance on its earnings-related jump, shares of ADSK have pulled back for several sessions and appear to be holding supports successfully.

In Wednesday’s session ADSK confirmed a pivot low within an uptrend in the right side of its existing cup base. That same action can be expressed as a handle consolidation. Traditional breakout entries would come into play on a move through the Aug 15 post-earnings highs. And for those more appreciative of “buying the dips and selling the rips”, the first half of that non-quantitative equation appears to be in fluid motion like many of Autodesk’s other amazing works of art. 

Figure 2: Websense (WBSN) Weekly

Another software and Naz’ component hard at work technically are shares of Websense (WBSN). The one-time dot.com favorite has somewhat quietly moved into a position of relative strength during 2008. More recent and similar to Autodesk, “b-t-e” earnings results and then some subsequent “activist” value fund buying have made the past month a very good one. Shares of WBSN catapulted towards their best levels of the year and then ran up a bit more before stalling out of a weekly “W.”

Of late, the loss of upside momentum has turned into a constructive-looking three to four-week flat base pattern. With solid overall volume characteristics throughout both described patterns and a triple break of prior downtrend resistance, market leadership has a potential ally in Websense. And for option traders, possibly a decent candidate with which to design one of those softer delta bullish spreads, could be in order.


Chris Tyler
Staff Writer & Options Strategist
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.