Set Up For Shorts?
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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face=”Arial, Helvetica”>At the time this is being published,
the Globex S&P futures are trading down 1.90 points and
the bond market is trading down 1 tick.
face=”Arial, Helvetica”>On Monday, the Nasdaq lapped higher
but began to sell off in what appeared to be a pop-up
opening. However, it quickly found its low and began to
rally. After chopping around for much of the afternoon, it
began to lose ground. Buyers then came in to save the day
and pushed the index back up to close well.
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face=”Arial, Helvetica”>Monday was a decent day no matter
how you look at it. This is the type of follow-through that
we should have seen on Friday, after Thursday’s turnaround.
This now gives us three up days.
face=”Arial, Helvetica”>So what do we do? Even with Monday’s
rally, we’re still in retrace mode. I would imagine that
there will be some resistance in the 3,900-to-4,000 range.
Therefore, I see no reason to get too bullish just yet.
face=”Arial, Helvetica”>Looking to potential setups, Barr
Labs
(
BRL |
Quote |
Chart |
News |
PowerRating), on the
From Highs List, looks poised to rally out of a
high-level cup-and-handle formation.
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Triton
Energy
(
OIL |
Quote |
Chart |
News |
PowerRating), mentioned Friday, began rallying out of a
pullback on Monday, in spite of weakness in the underlying
commodity. Based on this, the stock still may have
additional upside potential.
For
you breakout players, Biomet
(
BMET |
Quote |
Chart |
News |
PowerRating), also on the
From Highs List, is consolidating after its recent
breakout from a high-level consolidation, and it looks
poised to break higher.
On
the short side, the three-day bounce from lows has set up
some decent-looking shorts.
With
that said, Allegiance Telecom
(
ALGX |
Quote |
Chart |
News |
PowerRating), on the
Implosion List, looks poised to resume its meltdown.
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Primus
Knowledge Solutions
(
PKSI |
Quote |
Chart |
News |
PowerRating), on the
Where The Action Is List, gapped higher on Monday’s open
(a) but reversed to close poorly. This suggests that its
downtrend remains intact.
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Even
though M-Systems
(
FLSH |
Quote |
Chart |
News |
PowerRating), mentioned Friday, was up on
Monday, it still looks like it has the potential to resume
its meltdown, and it may be worth watching going forward. As
usual, just wait for follow-through before attempting an
entry.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!