Let’s Not Start Kissing Each Just Yet
On Wednesday, the Nasdaq opened flat but rallied for
a solid trend day higher. This action forms a bullish outside day that closed
well. This action puts its near recent highs and not far from the pre 9/11
level.
The S&P also put in a sold performance. The longer-term
trend still remains down. However, like many stocks, it is beginning to form a
low-level cup and handle. Follow through will be key.Â
So what do we do? The
longer-term trend still remains down. However, as I look through hundreds of
charts I see that many stocks are beginning to set up on the long side. And, I
was unable to find any meaningful shorts. So, does this mean that we should all
turn bullish? No. Let’s not start kissing each other just yet. Why not wait for
the indices to climb above the 50-day moving averages and stabilize before we
start to party? With that said, I believe we can continue to nibble
on the long side. Provided of course, we wait for follow through and honor our
stops.
Looking to potential setups, in the strong drugs/healthcare
(and in these times, many need strong drugs),
Express Scripts
(
ESRX |
Quote |
Chart |
News |
PowerRating) looks like it has the potential to rally out of a
pullback.
Continuing on the drug theme,
Cima (not to be confused with Zima which tastes really bad) Labs
(
CIMA |
Quote |
Chart |
News |
PowerRating)
looks like it has the potential to rally out of a low-level cup and handle/Bow
Tie like formation
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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