Back To Missouri Mode
On Thursday, the Nasdaq gapped open on the
Microsoft news, and after an early morning pullback, resumed its rally
to close well.Â
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The S&P also had
a solid trend day higher.
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So what do we do? I’m not nuts about trading in
such a reactionary environment. If this is the “real
deal” then their will be plenty of opportunities along the way.
For now, I’m taking more of a show-me approach. I’d like to see the
indices get above their 50-day moving averages and base before getting
too enthused. As you know, I like to wait for a trend to develop–I’m
willing to forgo the first move from lows while the market proves
itself.
Looking to potential setups, I’m not seeing too
many stocks set up for the momentum swing trader. There are some
REIT’s and insurance stocks set up, but this hardly makes for the
ingredients for a new bull market.
Andrx Corp. (ADRX),
mentioned recently, appears to be resuming its uptrend.
For those with big
ones*, NVIDIA (NVDA)
looks like it may have the potential to resume its breakdown out of a
Bow Tie. Because the entry is so far away, the nimble day
trader may consider a head start on a swing trade if it breaks down
from its early morning range on Friday.
Walk Through Con’t.
Lately, we’ve been looking at where we could have
entered, taken partial profits and tightened stops on Human Genome
Sciences (HGSI),
a stock mentioned recently. If you haven’t read these commentaries,
now might be a good time before proceeding.Â
On Thursday, HGSI resumed its slide. For purposes
of this walk through, we’ll keep trailing the stop at two-bar highs.
As mentioned recently, keep in mind that as a swing trade, there’s
nothing wrong with locking in a piece or all of the profits,
especially on such a sharp move.
For more information on money management and
position management read my articles under Traders
Lessons.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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