If You See This After A Gap Up, Beware
When the broader market
gaps higher, we often expect a pullback of some magnitude as the
early morning demand for stocks dries up. After the initial pent-up investor demand
gets filled by the market makers and specialists (by taking on the bulk of the
investor euphoria), these pros will more than likely at a minimum try
to do some price-probing to sniff out stops, and see who really wants a piece of
the action based off the latest news.
However, when a stock continues to demonstrate
weakness, it just might be another story altogether. It’s times like these
when relative weakness is obvious–and of course the charting tea leaves are in
place–that it just might be worth your while to go short a stock in a market
made up of individual issues.
12:40:30
Intraday Setup Alert
Cognizant Technology (CTSH)
has formed a low level intraday consolidation after testing hammer lows on the
daily. With the stock off .96 at 48.26, the issue has been demonstrating
relative weakness as of late. Potential shorts below pattern supports are set
thru 48.05. The next area of technical support for the issue looks to be between
47 – 47.31–consisting of a gap fill and a 62% Fib retracement on the daily
perspective.
It wasn’t easy to get in, but if you did—it
sure made a whole lotta ‘cents.’