Pick A Team
Each morning this
list will contain those stocks with the potential to make a quick but tradable
move in the first hour. The information listed here is designed for the
trader who catches the early morning momentum, between the first five and 45
minutes of trading. Many stocks open each morning, run for several points and
then reverse. I will cover stocks with this potential and highlight possible
reversal points and resistance areas. These points need to be monitored closely,
as the stocks may turn quickly here. Be ready to lock in profits quickly.
Morning Outlook
Watch for a turnaround in the first 10-30
minutes of trading. Keep an eye on the stocks that gap the most in the morning.
Use the Nasdaq tracking stock (QQQ)
or futures as leading indicators.
Uncertainty
continues to pervade the market, causing excessive volatility. Looking at
Thursday’s 10-minute chart of the Nasdaq futures, one can see just how crazy
things were. Near 2:00PM ET, the Nadsaq futures re-opened after being locked.
The S&P futures then reopened a few moments later, resulting in a market
bottom. It is times like those that you pray you do not get caught in short-covering. Many of the big names recovered, and quickly. If you were long,
congratulations!
The SOX made a nice recovery as well, rallying all the way back
to its morning highs, and ending the day positive.
Sadly, all of this uncertainty has ruined so many of the
beautiful patterns in many of the biggest names. Alas, the market has again been distracted by other world issues.
The question is, which sectors are acting well through all of
this? The utility sector, for one, remains a defensive group, and continues to
trade in a consolidation pattern with a bigger-picture ascending triangle.
The healthcare sector is also a strong performer, moving north
in an uptrending channel.
In fact, the weekly chart shows a breakout from a
cup-with-handle formation.
Despite what many people think, it is possible to daytrade
utilities and healthcare stocks, especially when the scared money is looking for
a home.
One To Watch:
(
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PowerRating)
Manugistics
(
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PowerRating) is sitting at a key pivot point. It
broke through the trendline which was so efficiently guiding it higher. Closing
on its lows on Thursday, it found support just a notch below the breakout
level. Watch for a continuation move on Friday to offer an addition short
opportunity. If the market is strong, or if some sense of security returns, the
stock may reverse.
If you are playing the short side at all today, I
remind you to trail your stops. Looking above, you can see just what
happened when the shorts ran for cover. Anyone on the wrong side of those trades
went home a bit sore.
Until later,
David Baker