3 Sectors To Buy...And 2 to Sell

On Monday, the Nasdaq generally worked its way lower throughout the day. This action puts it below its 10-day simple and 20-day exponential moving averages. It also puts it below a considerable amount of overhead resistance. Note: if these terms are new to you, I will be explaining them further in Wednesday's audio/visual interactive presentation. 

The S&P put in a similar performance. This action puts it below all 3 of its "Bow Tie" moving averages (again, I'll explain further on Wednesday). 

So what do we do? The action in the indices and especially the sectors remains concerning. Areas that recently led us higher such as biotech and retail continue to slide. Therefore, on the long side, continue to focus on those areas in strong uptrends that can trade independently of the indices such as metals & mining and the energies. On the short side, we will likely see transitional patterns (early trend) soon in areas that have recently broken down such as the homebuilders, retail, and now possibly biotech (to name a few). 

As far as setups, Callon Petroleum (CPE | Quote | Chart | News | PowerRating),  in the independent oil and gas sub-sector (a), looks like it has the potential to resume its uptrend out of a Persistent Pullback (email me if you need the rules). Cal Dive (CDIS | Quote | Chart | News | PowerRating),mentioned recently and also in the energies, still looks like it has the potential to resume its strong uptrend out of a pullback.

Cal Dive (CDIS | Quote | Chart | News | PowerRating),mentioned recently and also in the energies, still looks like it has the potential to resume its strong uptrend out of a pullback..

Best of luck with your trading on Tuesday!

Dave Landry

dave@davelandry.com

P.S. Reminder: Protective stops on every trade!

P.P.S. Learn my newest and most advanced version of my Bow Ties Strategy. Click here for details.