Never Say Never Again
On Monday, I was speaking with a trader regarding a certain intraday setup that I was watching. During
each move, I was pointing out to him the level that I wanted to see the stock
take out before I would take a position. After three consolidations and three
strong moves higher, he would not relent. Still he said, “Don’t do it, it’s
got to be at a near-term top.” My response was simple, and based on years
of experience, “Don’t ever say that a stock or future can’t go
higher.”
As traders, it’s not our
job to outsmart the market, it’s our job to follow its lead. If the momo is
there, then ride it, don’t fight it. Don’t ever think that a stock can’t go
higher or lower. I remember one day when I saw SDLI down about 20 points, and it
was setting up for another short move. It was already down 20 points. “How could
I go short?” I thought to myself. SDLI ended down roughly 53 points that day.
Enough said.
Today’s Watchlist:Â Â
(
AUD |
Quote |
Chart |
News |
PowerRating),
(
ITWO |
Quote |
Chart |
News |
PowerRating),
(
PDLI |
Quote |
Chart |
News |
PowerRating),
(
GLW |
Quote |
Chart |
News |
PowerRating)
On the charts, the
green line is the 200-day MA and the blue line is the 50-day MA. I have also
added ADX readings at the bottom of each chart.
Automatic Data Processing
(
AUD |
Quote |
Chart |
News |
PowerRating) closed at a new high by just one teeny on Monday. What’s key to this
move is the strong volume that backed it, despite the volume lull in the market.
We’ll now await a move above Monday’s intraday high to offer a potential long
opportunity. Swing traders need to be on alert. Follow
through in this market has been limited. In times like these, we must limit
ourselves to the best trades, with volume-backed moves in strong trends. When
looking for stocks to buy, focus on those above all of the key moving averages.
Daytraders trading off daily patterns should use the same mentality.Â
iTwo Technologies
(
ITWO |
Quote |
Chart |
News |
PowerRating)
broke out of a small cup pattern that it formed over the last few weeks. The
move was on reasonable volume, but nothing spectacular. In the last few months
we have seen a series of high lows, as well as some large price swings. As with
any breakout, we’ll monitor ITWO for a move above the intraday high from Monday.
With the first hour trading now passed, the market has settled down some. Again,
in this market, you have to be careful when trading in the first hour. Set your
alerts near 155.
Protein Design Labs
(
PDLI |
Quote |
Chart |
News |
PowerRating)
is poised to take out its downtrend. Aggressive traders may watch for an entry
just over the first trendline, while more conservative players should watch for
a break of the 50-day MA, which is roughly 5 points away. PDLI has a pending
split following last weeks strong earnings announcement. I have not really seen
a split run in a while, but it could happen. The strong close on Monday was a
positive sign, so we will watch for a continuation move on Tuesday.
Last on the list is
Corning
(
GLW |
Quote |
Chart |
News |
PowerRating). Corning continues to consolidate near its all-time high.
Watch for a move above the level that I highlighted to lead to a test of the
false-breakout high set last week. If it can take out that level, it will be in
free-and-clear territory, where there is no overhead resistance. Look for a move
backed by strong volume. The daily charts also resemble a high-level inverted
head-and-shoulders pattern. A break of the neckline would be very bullish.
Until later,Â
Check back at 2:00PM ET
for Trading the Techs PM.
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