Here’s Technical Evidence To Stay Neutral
There are times where it makes
a lot of ‘cents’ to reverse a high-probability trade that didn’t quite live up
to expectations, as trade begins to move in the other direction.
Just because a trade doesn’t work in one direction,
and you are ultimately stopped out for a small loss doesn’t necessarily mean
that a trigger exists to reverse the original trade.
09:03:48
Reversal Zone
The semiconductor HOLDRs (SMH)
has moved aggressively higher off a combination of Intel (INTC)
news and bullish, broader market reports–up approximately .85 at 37.55.
This action has the sector proxy testing upside resistance of 37.50 – 38. This
key zone, based on the 15-minute extended and daily charts contains the 50 and
200-Day EMAs, as well as 4 levels of Fibonacci resistance (5/28 and 6/2 pivot
highs). Traders might initially look for
Opening Reversals to fade the gap.
09:48:40
Intraday Update Alert
The semiconductor HOLDRs (SMH)
will trigger shorts out of an
Opening Reversal 5-minute formation below 37.42–currently up .75 at 37.50.
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When there is still ample technical evidence on
the larger time frame that lends support (or should I say resistance?), it’s
more likely than not, deserved of your attention and worthy of staying on the
sidelines at least temporarily. Quite often the best bet is to accept the small
loss and look for further technical clues with a neutral bias within our
continuous journey in the markets.
Chris Tyler