A Sector And A Stock That Look Poised To Go Higher
On Thursday, the Nasdaq dipped in early trading but quickly
found its low and began to rally. Then, after trading back-and-forth for much of
the day, it resumed its rally going into the close.
The S&P chopped back and forth in a narrow range.
As far as sectors, most are in solid uptrends like the
market itself. Even the semis, which have been lagging, have recently broken out.
So what do we do? I still remain concerned about the
overbought nature of the market. The good news is that we are beginning to
see some “rolling” corrective action. That is, certain areas are
correcting even though the market continues higher. Therefore, focus mostly on
these areas but keep position sizes within reason since we remain overbought
overall.
As far as setups, the Retail HOLDRs
(
RTH |
Quote |
Chart |
News |
PowerRating) are an example
of the aforementioned rolling correction. Notice how they have pulled back and look
poised to resume their strong uptrend.
Essex Corp.
(
KEYW |
Quote |
Chart |
News |
PowerRating), in the strong
defense sector (and let’s face it, what good is a weak defense?), looks poised to resume its
accelerated uptrend out of a
pullback.
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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