Overextended 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.
As you know, lately I’ve been discussing the fact that many stocks are overextended. Therefore, at the risk of being repetitive, tonight my focus will remain on stocks that are in pullbacks or pullback-like formations.
Considering the above, several stocks on the Pullback List look interesting to me tonight. BEA Systems [BEAS>BEAS] appears to be rallying out of a 3-bar pullback. Oracle [ORCL>ORCL], in the strong Software Sector [$CWX.X>$CWX.X], appears to have turned back into the direction of its longer term uptrend. And finally, Aspect Telecommunications [ASPT>ASPT] closed well (a) and looks poised to resume its strong uptrend.
Comverse Technology [CMVT>CMVT], mentioned last night, has begun to rally out of a 3-bar pullback and still looks interesting to me.
Metricom [MCOM>MCOM], mentioned over the past few nights (see archives), broke out of a flag formation today and looks like it has the potential to challenge its old highs (around 61).
On the short side, Land’s End [LE>LE], on the Pullbacks From Lows List, appears to be stalling out after rallying from lows. Watch for a potential challenge of its old lows (around 50).
Best of luck with your trading on Monday!
PS – Reminder: Protective stops on every trade!