Bounce Soon?
On Thursday, the Nasdaq opened lower but managed to quickly
turn around. However, it found its high early and then chopped lower for most of
the day. Then, after testing new lows, it rallied nicely to close well.Â
The S&P also appears to be stabilizing.Â
So what do we do? I think we are due for a bounce in here.
However, there are enough crosscurrents out there to make shorting a possibility
(for those who aren’t already short). On the long side, stick with issues that
have remained strong throughout the last downturn or those stocks that have the
ability to trade contra to the overall market (e.g., foods, gold or oil/oil
service on a turnaround).Â
Looking to potential setups, Adolph Coors
(
RKY |
Quote |
Chart |
News |
PowerRating) in the
strong beer group (and let’s face it, in these markets, we could all use a
strong beer), appears to be stabilizing in its deep pullback. This action
suggests it has the potential to resume its strong uptrend.
Lennar
(
LEN |
Quote |
Chart |
News |
PowerRating), in the recently mentioned weak
homebuilders (and less face it, other than a big bad wolf, who wants a weak
home?), looks like it has the potential to break down out of a big picture
inverted cup and handle –or– if you prefer, a head and shoulders like
formation.
Best of luck with
your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…….While on the road I take your book and read it again and again in the evenings. It is a bible that should be read by all traders (and I’ve been in the business for 30 years). Oh, how I wish I would have had your book 30 years ago.
Anyway, keep up the good work!…..”Â
Thanks!
Bill B.
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