Cup & Handle
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.
At the time this is being published, the S&P Globex Futures are trading 1.50 points lower and the bond market is trading up 1 ticks.
Last night, I talked about that fact that the cash S&P [$SPX>$SPX] had slipped below the 1400 level. Today, it rallied back to just below that level. This suggests that the bigger picture cup and handle is still intact. That, combined with 4 signals pointing higher on the Market Bias Page suggests an upside bias for tomorrow.
Tonight we updated our Cup and Handle List. I especially like Lucent Technologies [LU>LU] which is a bigger picture pattern that formed an outside day in the handle today and closed well (a).
First pullbacks are normally bullish as they often provide the first chance to climb aboard a fast trend. With that said, the Software Sector [$CWX.X>$CWX.X] has been on a tear as of late and is now in its first pullback (a). Look for buying opportunities in stocks in the sector and with related patterns such as Oracle [ORCL>ORCL] and Veritas [VRTS>VRTS] on the Pullbacks List.
3 Com [COMS>COMS] and Art Technology [ARTG>ARTG], mentioned last night, both closed well today and look poised to rally out of pullbacks.
For you breakout players, Celgene [CELG>CELG], mentioned over the past few nights, rallied to close at a new closing high today. Continue to look for a buying opportunity here or better yet, wait for the next pullback. CheckFree [CKFR>CKFR], on the Proprietary Momentum List, closed at a new closing high today and looks poised to breakout of a high level 5 bar sideways consolidation.
Best of luck with your trading on Thursday!
PS – Reminder: Protective stops on every trade!