Chop
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 Friday, the Nasdaq opened flat and after a brief blip
up, chopped lower to close poorly.
Friday’s action brings the Nasdaq to the 2100 support
level. If broken, 2000, which corresponds with the 50-day moving
average, will likely be the next support level.
So what do we do? We remain in chop mode. However, based on
the number of stocks that are setup, I remain constructive on the market. I am
concerned about the last of follow through as of late. Therefore, I think the
best thing to do is to put your watch list of stocks together and keep an eye on
them. I see no reason to bet the farm until we see signs of rallying out of this
range. Therefore, continue to focus on the long side but keep it light, wait for
entries and above all, HONOR YOUR STOPS.
Looking to potential setups, Expedia
(
EXPE |
Quote |
Chart |
News |
PowerRating), mentioned
recently, still looks poised to resume its strong uptrend. Just continue to wait for
follow through to the upside here (i.e. no tickee, no tradee, see below) as it did close
poorly.
RF Micro Devices
(
RFMD |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List and Trading
Where The Action Is List, appears to be finding support near 28. This
action suggests that it has the potential to resume its strong uptrend.
NVIDIA
(
NVDA |
Quote |
Chart |
News |
PowerRating), on
the Pullbacks
Off Highs List, looks poised to rally out of a two-step pullback.
Quest Diagnostics
(
DGX |
Quote |
Chart |
News |
PowerRating), another pullback, looks like
it has the potential to resume its strong uptrend.
No Tickee, No Tradee
On Friday, both EXPE and AGIL, mentioned Thursday night,
both traded lower. However, neither one “triggered”–traded above the
prior 1-2 bar highs. As you can see, this simple rule can often* keep you out of
trouble. Wait for entries.
Best
of luck with your trading on Monday!
P.S. Reminder:
Protective stops on every trade!
*Obviously, like all trading rules, it doesn’t always
work. NUE and SONS triggered but did not follow though.
“…Thanks for writing a great book. That’s basically how I’ve come to
learn swing trading…..”
K. W.
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