Friday, Now What’s That?
David Landry is staying behind and
enjoying the sights and sounds of fabulous Las Vegas for a couple more days
after TradingMarkets2000. Tonight’s column is being written by TradersWire’s
Duke Heberlein.
My, my, my, how quickly the market turns. The Nasdaq Composite
opened at its high and basically was in free fall for most of the day, mounting
a small rally in the last two hours of trading. This action has the index
closing in an outside day from Monday’s trading, in the lower part of its range
(A).
So how do we proceed? Well the path of least resistance appears
to have a downside bias to it, as the chart above is telling me that there is a
good chance the index could re-test Friday’s low. That’s right — Friday’s
low. As Kevin Marder pointed out in his column on Tuesday afternoon, despite
Friday’s metoric one-day rally, the morning was the low tick for the latest
waterfall. Therefore, I would focus on some short setups in the event that is
what happens, and my longs would only be in stocks that showed strength during
Tuesday’s limp performance by the market in general — these stocks that buck
the downtrend will often explode when the market turns to the positive.
Looking at potential setups, Astropower
(
APWR |
Quote |
Chart |
News |
PowerRating), off the Proprietary
Momentum List, has formed an inside day. Giving further support to the setup
is the fact that it sold off Tuesday, but reversed to close in the high portion
of its range.
IDEC Pharmaceuticals
(
IDEC |
Quote |
Chart |
News |
PowerRating), also on that list, broke out to
new highs on an overall down day for the market, and also managed to close in
the upper part of its range. Look for the possibility of follow-through here.
Partnerre
(
PRE |
Quote |
Chart |
News |
PowerRating), from the Pullbacks
From Highs List, has pulled back and formed a pennant on its 20-day moving
average. Look for a possible break to the upside from the pattern.
Looking at the short side, Chartered Semiconductor
(
CHRT |
Quote |
Chart |
News |
PowerRating),
off the Implosion
List, closed poorly after breaking down from a mini-triangle at its lows.
Look for follow-through to the downside from here. The Internet Holders
(
HHH |
Quote |
Chart |
News |
PowerRating),
from the same list, had a wide-range bar down, closed poorly, and took out the
previous two lows on the daily chart. Keep your eyes out for additional weakness
in Wednesday’s session. Finally, Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating), from the Pullbacks
From Lows List, appears poised to resume its downtrend.
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Best of luck with your trading on Wednesday!
P.S. – Protective stops on every trade.
P.P.S- I really enjoyed meeting all of you in Las Vegas and
hearing your suggestions and comments regarding the website, trading, and
TradersWire. To those of you who were unable to make it this year, hopefully
next year I will get to see you, TM2001 should only get better.