Look For Evidence To Trade Both Longs And Shorts
It’s fast become the type of
environment where it probably makes ‘cents’ to look for both long and short
trades.
With the broader market’s eight-session upside
surge coupled with historic low volatility readings–we’ve entered an area of
trade that will probably reward both bulls and bears, as both groups now (well
don’t they always) have legitimate claims to the market turf out there. The
bears can use the overbought technical argument already mentioned–but the bulls
can also look to growth stocks showing strong basing patterns, and the
Follow-Thru-Day established in Friday’s trade as reason for the market to keep
on trucking.
So, in today’s session I was looking to find both
shorts and longs. One short that I noticed, was a potential daily chart swing
play in the Oil Services HOLDRs
(
OIH |
Quote |
Chart |
News |
PowerRating)…like a giant cargo tanker, this one
has steered clear of the recent move that has put many issues in uptrend mode.
12:31:05
Daily/Swing Chart Setup
The Oil Services HOLDRs (OIH)
have put in an established downtrend on the daily chart. With today’s
action, and the sector proxy off by .39 at 68.26–the OIH has been held in check
by the 50-Day EMA for the past three trading days, after finding resistance at
the 50-Day SMA–which ultimately confirmed the downtrend channel. Short
positions using the daily perspective might look for entries thru pivot and
minor trendline support of 67.66 – 68, as the intermediate downtrend looks to
establish itself again.
We ultimately don’t know if an individual trade like this will pan out. The
first thing that needs to happen is an actual trigger for the trader who decides
there’s an edge worth considering. Should it start to venture down the channel
though–it sure does look like something to get on board for a potential ride
further down the proverbial river.