Another Try At A Bounce Play?
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.
On
Wednesday, the Nasdaq lapped slightly higher on the open (a) but began to slide.
The good news is that if found its low early and rallied for an
impressive trend day higher. This action has it closing on its high (a).
The stab below 2400 and
subsequent recovery is somewhat encouraging and suggests we could get a
bounce from oversold in here. I say this with reservation as this market has
been prone to so many false starts lately.
The S&P also recovered
nicely (a) after tailing lower (b).
So what do we do? I
like the potential for the long side bounce play in here but see no reason to
load the boat. So once again, nibble only. It’s better to save money in a poor
environment than to lose it all before good times return. Survival is key.
Looking to potential setups,
Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday as a potential volatility
play, rallied to the top of its recent range (a). This suggests that it break
may be higher as volatility (b) reverts to its mean.
ENSCO
(
ESV |
Quote |
Chart |
News |
PowerRating), on
the Cup
and Handle List, looks like it has the potential to rally out of its handle.
Insight Enterprises
(
NSIT |
Quote |
Chart |
News |
PowerRating), mentioned recently and on the same list, also looks like it has
potential.
Best
of luck with your trading on Thursday!
P.S. Reminder:
Protective stops on every trade!
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