Coming Together
One day after the Feds move to lower
interest rates for a ninth time, the markets rallied in a big way. Very good,
very good indeed. Volume was nice in the session. Now the key is to see if
everything will hold up, such as the the stocks which we have been watching that
broke out on good volume. Breadth (on a big picture scale) would be a nice plus
to add to this factor to further confirm the action in the session.Â
It appears that things are falling
into place which is nice to see. It is prudent still to continue to adjust
position size and use tight stops on every trade. Everything is still up in the
air with Afghanistan, so lets be safe by testing the environment and as usual we
will continue to build our lists of potential
candidates that are showing strong fundamental and technical characteristics for
both intermediate term and turnaround plays. Right now we are happy to ride the
momentum.
Copart
(
CPRT |
Quote |
Chart |
News |
PowerRating) which was mentioned
in this column a few weeks ago broke out on extremely high volume today.
Generic drug maker Duramed
(
DRMD |
Quote |
Chart |
News |
PowerRating)
is scaling up the right side of its 10+ week base. The stock had a nice pull
back off its major trend only to resume in the same direction of the trend
shortly there after. DRMD has shown some nice earnings and sales growth over the
last 4 quarters. Closing above the 20 and 50 day average is a positive also.
Remember that all securities are
risky. In any trade, you should always reduce your risk by adjusting position
size and placing open protective stops where you will sell your long or
cover your short in case the market turns against you. For an introduction to
combining price stops with position sizing, see Loren’s lesson, Risky
Business.
Greg
P.S. I am excited to meet
you all this weekend at Tradingmarkets2001. I look forward to mingling with you
at cocktail party Friday night.
Â
Â