Cautionary But Still Constructive
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The market Friday continued to offer
relatively few decent setups among the high relative strength names,
while past breakouts continue to act constructively.Â
This scenario is consistent with an
intermediate-term rally undergoing a consolidation, rather than a short-term
rally giving way to renewed correction. As always, I’d stay with the strength,
avoid the weakness (including big-cap tech), watch my stops and look for
opportunities to take profits.
Bisys (BSYS),
a provider of information processing and check imaging to financial
institutions, is acting constructively just below new high ground.
Abercrombie
& Fitch (ANF)
has pulled back, providing a pivot for possible entry above 46 1/4. Remember, of
course, that all stocks are speculative and risky. On any trade, reduce your
risk by limiting your position size to a percentage of your total account and
setting inviolable price stops. For an intro to combining stops with position
sizing, check out my lesson, Risky
Business.
ESC Medical Systems (ESCM)
broke out on heavy volume, ran into selling,
but held up reasonably well, setting up a possible secondary entry. Ideally, the
stock will consolidate before attempting to break out anew. The company makes
laser-based systems for the aesthetic and medical communities. Its product
markets include dermatology, plastic surgery, cosmetic surgery, general surgery,
gynecology, oncology, urology, orthopedics, veterinary medicine, oral surgery,
dentistry and ear, nose and throat
Finally, friends, I will be going on a
sabbatical from TradingMarkets to focus on my own trading and accept a new
opportunity that has come my way. Not to worry, though. I am handing over the
daily Intermediate-Term Trader commentary to Greg Che, a great intermediate-term
trader and chart analyst. Greg will join an already-super-strong
intermediate-term lineup at TradingMarkets that includes Tim Truebenbach
and Gary Kaltbaum. I look forward to seeing those of you who attend the Kaltbaum/Fleckenstein
workshop in Atlanta and TradingMarkets2001 in Las Vegas! I wish all of you the
best of success.