Interesting Stocks
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .70 points lower.
Vignette [VIGN>VIGN], on the Pullbacks List, closed strongly today (b) reversing yesterday’s sell off (a) and looks poised to resume its strong uptrend. JDS Uniphase [JDSU>JDSU], a similar pattern, also looks poised to resume its uptrend, especially if it can take out yesterday’s pivot high.
For you breakout players, Rational Software [RATL>RATL], mentioned last night, broke to new highs on an expansion of range out of a shallow pullback today (a). You may have noticed that the pattern it broke from is a pattern I call a Trend Knock Out (TKO). For those of you not familiar with the pattern, this is when a strongly trending stock sells off and takes out (at least) the prior two lows (b). The theory is that this “knocks out†the weak hands and clears the way for the security to trade higher. US internetworking [USIX>USIX], mentioned last night, took out Friday’s pivot high (see last night’s archive for a detailed explanation of the Trend Pivot Pullback pattern) to close at a 2-month high. Continue to look for a buying opportunity here.
Stocks in fast moves often only consolidate for a few days before heading higher. With that said, Natural Microsystems [NMSS>NMSS], in the strong Semiconductor Sector [$SOX.X>$SOX.X], and on the Proprietary Momentum List, formed an inside day today and looks poised to break higher.
On the short side, Gilead Sciences [GILD>GILD], on the Proprietary Implosion List,
has formed a narrow range consolidation and looks poised to resume its meltdown. Hewlett Packard [HWP>HWP], on the Proprietary Implosion List, sold off today and appears to have resumed its downtrend.
BTW, the first installment of the Larry Connors/Mark Boucher Stock Market and Mutual Fund Timing Course is now live. I got a peek at the second installment today (to be published Friday) and there is some really great information in there. Make sure you sign up for their course. It’s free to members!
Best of luck with your trading on Thursday!
Dave Landry
PS – Reminder: Protective stops on every trade!