Holding Up
No new base-builders Wednesday, but
once again, April’s high RS breakouts held up well amid the market weakness.
Charlotte Russe
(
CHIC |
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PowerRating) is
consolidating nicely above its prior breakout point. Not quite high enough,
though, to offer an opportunity to pyramid for the intermediate-term trader
unless you day-trade around your positions with a stop tight enough to get out
without incurring a loss in your original position.
Mirant
(
MIR |
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PowerRating) is digesting its
breakout run in like fashion.
International Game Technology
(
IGT |
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PowerRating)
has eased down into its handle, the degradation of the relative strength line is
suspicious. However, this is an example of a position that you give room while
it holds above your stop. Don’t predict. Respond.
All stocks, of course, are risky. In
any new trade, reduce your risk by limiting your position size and setting a
protective price stop where you will sell your new buy or cover your short in
case the market turns against you. For an introduction to combining price stops
with position sizing, see my lesson,
Risky Business.