Baby Blues
On Wednesday, the Nasdaq lapped higher and continued
sharply higher in early trading. It then generally worked its way higher for
most of the day. It did drift and chop in late-day trading but this wasn’t
enough to keep it from closing well. This action has it approaching its 200-day
moving average.
A lot of you have been wondering when I am going to turn my
down arrows up. Well, the longer-term trend still remains down. However,
you can’t argue with the impressive rally from lows. This is especially true now
that the index is holding up well above its breakout levels. Therefore, maybe
it’s time to start drawing a new shorter-term up arrow.
When you remove the moving averages, the change in scaling
makes the rally look a little more impressive.
The S&P put in a solid day. This action has it hitting and
closing at multi-month highs.
Although it pales in comparison to the Nasdaq, it too looks
more impressive when you reduce the scaling.
So what do we do? I’m encouraged by the fact that the Dow
and S&P finally seem to be joining in with the Nasdaq. Technology still
seems to be the place to be though. Software, Internet, the semis and telecom
all remain in solid uptrends. Other lagging areas in tech such as biotech also
now appear to be waking up. Therefore, considering the above, continue to look
for opportunities in tech. Use caution though, the (shortened) trading day after
Thanksgiving is notorious for being choppy.
Looking to potential setups, F5 Networks
(
FFIV |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday and in the strong Internet software and services sub-sector,
still looks poised to rally out of a pullback/TKO.
Although tonight’s (Wednesday) column may seem that I’ve
got my horns on, I haven’t completely forgotten about the short side. The HMOs
(a.k.a. health care plans), look poised to resume their downtrend out of a
pullback from lows. With that said, Anthem
(
ATH |
Quote |
Chart |
News |
PowerRating) looks poised to resume its
meltdown out of a pullback from lows.
Other
Lots of good stuff on sale for this holiday weekend at TradersGalleria.
Happy Thanksgiving! And for those outside the US, happy
Thursday!
Best of luck with
your trading on Friday!
Dave Landry
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