Beeline
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
markets opening. Therefore, overnight events may alter the
outcome of these observations.
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On
Wednesday, the Nasdaq gapped lower to its exact high (a) and sold off to close
on its low (b) for a solid trend day lower. Other than a slight rally around the
open and some mid-day drifting, it was pretty much down all day.
This
has it closing right at the well-watched 200-day moving average. This beeline
down to these levels is somewhat concerning.
width=”470″ height=”320″>
So what do we do? Well there’s no need to jump
in and be a hero after another straight down day. You’re better off waiting for
the market to stabilize before attempting to enter.Â
Speaking of entries, no matter what happens,
make sure you wait for an entry (on the long side, usually for the stock to
trade above the prior day’s high) before jumping in. I’m still amazed at those
who blindly buy stocks just because they are setup. Look at Tuesday’s
commentary when you get a chance. Then, pull up charts on LPTH, VTSS
and HOMS. Notice that all got creamed on Wednesday, but none offered entries.
Remember: No Tickie, No Tradie.*
face=”Arial, Helvetica”>Looking to potential setups, Waters Corp.
(
WAT |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, is a two-step pullback. Guidant Corp.
(
GDT |
Quote |
Chart |
News |
PowerRating), on the
same list, is a three-bar pullback of a stock in a strong uptrend. At the risk
of preaching, just wait for follow through to the upside on these two as they
did close poorly on Wednesday.
width=”470″ height=”320″>
On the short side, The Gap
(
GPS |
Quote |
Chart |
News |
PowerRating), in the
vulnerable retail sector
(
$RLX.X |
Quote |
Chart |
News |
PowerRating) and on the Pullbacks
Off Lows List, looks poised to make another stair-step lower.Â
Clear Channel Communications
(
CCU |
Quote |
Chart |
News |
PowerRating), on the Proprietary
Implosion List, appears to be in a meltdown.Â
Best
of luck with your trading on Thursday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!