Light Day, No Liquidity
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 .40 points lower.
The day after Thanksgiving is historically a light volume day. This lack of liquidity can often make for difficult trading. Keep this in mind should you decide to trade on Friday. Otherwise take a break, the markets will still be there on Monday.
Tonight we have 4 indicators pointing higher on the Market Bias Page. This suggests an upside bias for Friday.
I recently mentioned that many stocks are extended. Therefore, tonight my focus is once again on stocks that have pulled back (versus breaking out).
Interleaf [LEAF>LEAF], mentioned last night, has begun to rally nicely out of a pullback and still looks interesting to me.
On the Pullbacks List, Qualcomm [QCOM>QCOM], mentioned recently, still looks poised to challenge its old highs. Comverse Technology [CMVT>CMVT] has formed a three bar pullback and closed well today. Gateway [GTW>GTW] closed well today and looks poised to rally out of a high level pullback/consolidation.
Metricom [MCOM>MCOM], mentioned over the past few nights (see archives), still looks poised to rally out of a flag formation. Just wait for it to prove itself by taking out the prior 1-3 bar highs.
As you know, the Trading Where The Action Is List contains the most volatile stocks and is only for the most aggressive traders who are willing to assume a higher degree of risk in order to capture larger gains.
With that said, Interphase [INPH>INPH] looks poised to rally out of a deep pullback and Chemdex [CMDX>CMDX] looks poised to rally out of a two step pullback.
Best of luck with your trading on Friday!
PS – Reminder: Protective stops on every trade!
PPS- HAPPY THANKSGIVING!