The Trend Is Still Your Friend
Make sure to register for the
upcoming course “The Baker/Ten Electronic Trading Course”, starting
July 7. Click
here to go to the registration page.
My latest trading lesson, Finding
Intraday Trendlines for Daytrading Part I, is also available now.
That’s right, it’s time for our weekly look at the Nasdaq. We finally broke
both above resistance and out of the short-term trading range early this week.
While the predictable tight range will be missed, we have to position ourselves
based on where the market stands today. Friday’s action has taken the Composite
below the short-term trendline. I’m content with the intraday bounce off the top
of trading range. Remember, resistance becomes support and vice-versa. As I
glance at the futures, I see that we just tested our intraday lows for a third
time. Ideally, this test of support on the daily charts will be enough to take
the Nasdaq higher.Â
What does this mean? It means that we will continue to focus on short-term
and intraday trading opportunities, locking in gains quickly, avoiding large
drawdowns.
Today’s Watchlist:Â
(
VERT |
Quote |
Chart |
News |
PowerRating),
(
ACTL |
Quote |
Chart |
News |
PowerRating),
(
POWI |
Quote |
Chart |
News |
PowerRating),
(
MMCN |
Quote |
Chart |
News |
PowerRating),
(
SSTI |
Quote |
Chart |
News |
PowerRating)
VerticalNet
(
VERT |
Quote |
Chart |
News |
PowerRating) is still
sitting in a low-level consolidation. As you know, these are some of my favorite
background plays, because we simply set our alerts just outside of the trading
range. As always, let the price action be your guide. On a breakout, we’ll take
another look at the stock.
Actel
(
ACTL |
Quote |
Chart |
News |
PowerRating) broke out to new highs earlier this week.
After making a greater than 10% move, the stock is pulling back. Look for a
retracement to the longer-term trendline followed by a bounce. If it pulls back
to this level, we’ll look for a bounce which takes out the intraday high of the
last pullback day. It sounds complicated, but it’s really not. Add this one to
your Watchlist and see where it stands on a daily basis.
Power Integrations
(
POWI |
Quote |
Chart |
News |
PowerRating) is sitting in a low-level
pattern. Set your alerts at 31 1/8, as we wait for a breakout. These low-level
breakout patterns are also great background plays. Background plays are those
that we don’t need to monitor on a daily basis. As always, be aware of the
next two resistance levels.
MMC Networks
(
MMCN |
Quote |
Chart |
News |
PowerRating) traced out a low-level cup-with-handle
pattern, from which it broke out this week. As it is only a small percentage off
the top of the cup, we’ll watch for both a continuation move and a retracement
to the trendline. It’s always difficult to decide where to enter a stock that’s
already broken out. I look for moves back to the longer-term trend, because no
matter how many times I see an explosive move that I can’t visualize moving back
to the trendline, it always does.
Silicon Storage Tech
(
SSTI |
Quote |
Chart |
News |
PowerRating)
broke out two days ago, but has yet to show a continuation move. It did make an
intraday move, but not a closing continuation, so we’ll just have to keep
watching.
Â
Have a great weekend,
Waiting in the Wings:
The
Fed – yes, again
Check back Monday morning at 9:15AM
ET for Trading the Open.