If You’re Looking For Short Candidates, Try These
The market came under further distribution–or professional
selling–today. It was evidenced by declines on heavier volume than yesterday.
The single positive was that volume did come in below average ahead of
tomorrow’s unemployment report.
Retailing stocks were one of
the day’s worse-performing
groups.
Besides the selling that we are seeing in the major
indices, this market does not appear to have any strong leadership. There are
very few stocks or groups that have seen constant inflows of investment
dollars.Â
^Next^
On the other hand, it is easy to find groups that have led
the market and are rolling over. The homebuilders are one example and can be
seen through Hovnanian
(
HOV |
Quote |
Chart |
News |
PowerRating) as it is about to break down through an upside-down
cup and handle, along with Ryland
(
RYL |
Quote |
Chart |
News |
PowerRating).Â
Internet stocks such as
Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating) have also started to
act suspicious as it saw a large decline on very heavy volume on 4/30 and has
been wedging higher on low volume ever since.Â
The homebuilders and Yahoo! are some of the examples to look
for if you are seeking out potential short candidates. Of course, shorting is
extremely difficult and should always be done while keeping risk in check with
stops.
It was a positive that the Nasdaq managed one more close
above its 200-day area of support, but how long this lasts may very well be known
around 8:30 am EST tomorrow when the jobs report appears.
Enjoy your weekend!
timt@tradingmarkets.com