A Second Wave?
While I’m not a
short-term trader per se, I do take profits when the stock
price action warrants it. Sometimes, rotation will occur within a
rally. This is not ideal. The I-T trader wants industry leadership to
hold up and lead for the medium term. But at times, you may find
yourself selling stocks acting tired
after smaller-than-usual pops, particularly if a new crop of set-ups
appears to be forming.
A second wave
of base builders could be coming in here. MGIC Investment (MTG)
broke out Wednesday. Quintiles (QTRN)
surged up the right side of a base.
Riverstone Networks (RSTN),
Retek (RETK)
and Astropower (APWR)
are consolidating here as well.
Among the exchange-traded
funds, most of the energy- and tech-focused ETFs lost ground. The Oil
Services HOLDR (OIH)
gave up 5.0%;
the
Wireless HOLDR (WMH)
3.4%;
the Dow
Jones Energy iShares (IYE)
2.8%;
the Broadband HOLDR (BDH)
2.7%;
the Energy SPDR (XLE)
2.6%;
Biotech HOLDR (BBH)
2.3%.
Remember to limit your risk
by using stops and limiting your allocation in individual stocks. For
an introduction to combining price stops with position sizing, see my
lesson, Risky
Business.