Here’s How A Reversal Can Develop
We don’t advocate picking tops,
but reversal setups eventually happen to even the strongest stocks. If an issue
that has been demonstrating relative strength to the broader market can’t seem
to get out of its way on a day in which the sector is trading higher, it might
be appropriate to look for a contra-type trade entry.
10:47:43
Intraday
Setup Alert
From the Nightly
Daytraders Report, Adobe (ADBE)
was listed under Institutional Favorites, but is showing signs of a
potential short setup. Intraday, the stock is nearing day lows of 34.25 out of a
“loose” 1,2,3 topping formation. The stock would trigger continuation
entries below this figure, which matches up with prior resistance highs from the
daily chart. ADBE is currently up .43 at 34.31.
I had Adobe listed under Institutional
Favorites
last night, but this morning it was painting a different story. As
technology rallied, Adobe was barely hanging on to price gains, all of this
from a sector leader within the software group. With a price pattern reversal
developing intraday, at prior key resistance levels Adobe was going from
Institutional Favorite “on paper,” to Institutional Laggard, and
primed for a short entry in today’s session.