Switcheroo
Each evening we focus on the most interesting
aspects for the upcoming trading day. The comments are based on observations of
the nightly updates of the Stocks/Sectors and Market Bias pages. They are
provided for educational purposes only and are not intended to be direct trading
advice. Also, keep in mind that these remarks are made up to 12 hours in advance
of the market’s opening. Therefore, overnight events may alter the outcome of
these observations.
Due to extenuating circumstances, David
Landry will be unable to write this column this evening. Dave should return on
Monday, November 27. Tonight’s piece is being written by TradersWire’s Duke
Heberlein.
Thank goodness for the Black Friday – the day following
Thanksgiving that places the majority of retailers into the black (if they
weren’t there already) for the remainder of the year with the holiday season
upon us. Possibly buoyed by the expectations of this day, the Nasdaq
(
COMPX |
Quote |
Chart |
News |
PowerRating)
gapped up 68 points higher and with the exception of a couple of pullbacks
along the way, rode a solid trend upward over the course of the shortened
holiday trading day and closed in the top of its range. This places the Naz at
the beginning stages of a pullback from low pattern on the daily chart.
So where do we go from here? The last two days (Wednesday and
Friday) are a great lesson in how you need to read what is on the chart as a
trader, and not attempt to project your own will on the market. In Wednesday’s
commentary, I had a bearish tone, since the charts were telling me that even
though the market was oversold, the path of least resistance was most likely to
the downside. Even so, I had some long side candidates ready in case the market
did snap back, which it did. Based on Friday’s action, I am now inclined to be a
little more bullish, since even in a bear market a rally can take shape over a
three-day period. The point I am making is reflected in the old adage,
“most markets turn on a dime, most traders can’t,” also adding
that what should happen does not always play out. Keeping that in mind, it’s
great to try to get a jump by seeing a possible bias as to the probable
direction, but be ready to go in either way according to what the market gives
you. Making money is not about being right, but going with the flow.
With that being said, Safeway Stores
(
SWY |
Quote |
Chart |
News |
PowerRating), from both the Proprietary
Momentum and Explosion
Lists, has set up in an inside day on its daily chart.
Cigna Healthcare
(
CI |
Quote |
Chart |
News |
PowerRating), off the Pullbacks
From Highs List, is pulling back to its 20-day moving average and could be
resuming its recent uptrend. Primex Technologies
(
PRMX |
Quote |
Chart |
News |
PowerRating), on the Explosion List, is
trading in an 11-day slim jim inside its last wide-range bar.
Keeping an eye on the short side (just in case), JNI Corp.
(
JNIC |
Quote |
Chart |
News |
PowerRating),
from the Trading
Where The Action Is List, is starting to trade in a pullback from low after
dropping more than 50% in a three-week period. Since fast moving stocks rarely
pause for very long, keep an eye out for a potential shorting opportunity here.
Finally, Capital One Financial
(
COF |
Quote |
Chart |
News |
PowerRating), off the Proprietary
Implosion List, is setting up into a triangle at the level of its recent
low.
Best of luck with your trading Monday!
P.S. Protective stops on every trade.