Look Both Ways
It is the nature of markets to retest prior highs and lows. Keeping that in
mind, I am looking at the overall trend when stalking for potential setups.
Despite the fact that the market is up for the third consecutive day and we have
had some solid upside setups, remember that even a bear market can rally for
three days and you need to be prepared for the possible retest of the prior low.
With this in mind, I did a search with the TradersWire
Scanner, looking for stocks that have pulled back from their
recent lows and could be good candidates to possibly resume their downtrend if
the market does head back to the downside in the next day or two. Both State
Street
(
STT |
Quote |
Chart |
News |
PowerRating) and Verisign
(
VRSN |
Quote |
Chart |
News |
PowerRating) appear poised to head lower
out of this simple pattern.
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I like STT as a possible downside candidate because it has room
for the swing trader to catch a good-sized point move on a probe toward the
previous low, and also has exhibited prior bounces down off the 20-day MA, which
it is hitting today.
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The use of the TradersWire Scanner will assist you in
spotting potential profits if you swing trade and scan the list of alerts
generated by the java applet, or maybe alert you to a trade you may have missed.
Now we will have to see how these stocks fare over the next few days.
Until tomorrow,
Duke