Trend Remains Up
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.
At the time this is being published, the S&P Globex Futures are trading 2.30 points lower and the bond market is trading down 4 ticks.
I was once told by a successful trader to believe in what I see in the markets and that trying to understand would likely interfere (and could be costly). With that said, don’t try to figure it out. Obviously, the trend remains up. Just honor your stops and don’t get too caught up in the hype.
On the Pullbacks List, several stocks look interesting to me tonight. Psinet [PSIX>PSIX] formed a bullish outside day (today’s high greater than yesterday’s high and today’s low less than yesterday’s low) in a pullback and closed well. Although it didn’t close as well (and on this wild one, what’s a few points?), China.com [CHINA>CHINA] is a similar pattern.
For you breakout players, Globix Corp. [GBIX>GBIX], mentioned last night, continues to consolidate at high levels and looks poised to make another run higher. Purchase Pro [PPRO>PPRO], mentioned over the past few nights, rallied to close at new highs today.
As you know, the Trading Where The Action Is List contains the most volatile stocks and is only for the most aggressive traders who are willing to assume a higher degree of risk in order to capture larger gains.
With that said, Verity [VRTY>VRTY], mentioned last night, sold off and closed poorly in spite of today’s rally. This one looks poised to challenge its old lows. Chemdex [CMDX>CMDX], also mentioned last night, closed at an all-time high today and looks poised to continue higher. And finally, Network Appliances [NTAP>NTAP] sold off earlier today (a) but reversed to close well (b). This may have shaken out the nervous longs and could clear the way for the stock to trade higher.
Backweb Technologies [BWEB>BWEB], on the Above 50-DEMA-DV List, closed well today and looks poised to rally out of a very deep correction. Pull up the weekly when you get a chance and you’ll see that the picture looks much better.
Best of luck with your trading on Wednesday!
PS – Reminder: Protective stops on every trade!