Continuation
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 gapped higher on a
better-than-expected GDP report. However, it found its high early on and chopped
around for most of the day. Then, late it the day, it mounted a decent rally and
closed well.
Friday’s action has the index nicely above its 50-day
moving average and suggests that a rally out of the first pullback is still a
possibility.
The broader market is getting overbought based on price and
breadth readings such as a low three-day average NYSE TRIN, the CHADTP and
the McCllean Oscilator. However, so far, I view these as signs of
strength–improving market internals. The fact that the most of tech appears
poised to rally out of first pullbacks/ Bow
Ties and/or cup and handles suggests that we’ll have some additional upside.
So what do we do? The long side, especially in tech,
remains the logical play. Yes, I have been more bullish lately but I still honor
my stops and take profits along the way. ‘Cause, as Dennis Miller says
“That’s just my opinion, I could be wrong”.Â
Looking to potential setups, NVIDIA
(
NVDA |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, recovered nicely from Thursday’s slide. This action suggests
that its uptrend remains intact. Use caution though, this one can be a little squirrelly.
Said another way (in my best Adam Sandler voice) “Did I mention that this
stock is c–raaaaa—zy”.
Juniper Networks
(
JNPR |
Quote |
Chart |
News |
PowerRating)
looks poised to rally out of a cup and handle.
Viropharma
(
VPHM |
Quote |
Chart |
News |
PowerRating), mentioned recently on the Pullbacks
Off Highs List, sold off earlier in the day but recovered to close well.
This suggests that its uptrend remains intact.
On the short side, Ambak
(
ABK |
Quote |
Chart |
News |
PowerRating), mentioned recently,
still looks vulnerable.
Other
Several of you have emailed me to ask if this is a bear
market rally. And, if so, why would I be bullish? The answer to the first
question is I don’t know. No one knows for sure. I’ll let you know after its
over. The answer to the second question is, as a momentum swing trader, I’m only
looking for a two-to-seven day thrust. And, so far, it looks like the market has
the potential to make/continue that thrust.Â
Best
of luck with your trading on Monday!Â
P.S. Reminder:
Protective stops on every trade!
“..Congratulations on a well written, well charted, and easy to read trading manual…..”
Jonathan
G.
Â
No risk, 30-day, money
back guarantee.
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