Insurers Building Bases
The financials continue to act
constructively, particularly in the insurance groups. This is far from the kind
of broad leadership that occurs in a nascent bull market, so if you’re looking
to trade for the medium term, keep your exposure limited.
Reinsurance underwriter Everest Re is
forming a cup-with-handle. Note the progression of higher lows (see Points a, b,
c and d in the following chart) within the base.
All stocks 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. For further treatment of these and related topics,
you’ll find extensive lessons in the Money
Management area of TradingMarkets’ Stocks Education section.
Kaltbaum on TradingMarketsWorld! Gary Kaltbaum will be appearing on the
Intermediate-Term Trading board Thursday, April 19 at 8:00 ET. Be sure to take
this opportunity to chat with and have your questions answered by a leading
intermediate-term trader. Click
here to take your trading to a new dimension.