Countrywide Breakout
Simple is often best when you are constructing your
daily game plan.
At a seminar last Saturday, I spoke to a trader who’d been slammed, playing
stocks like JDSU and BRCD–recently. The wide, fast swings held the promise of
good returns, if only he could figure out a way to enter at the right time. I
told this trader that we’re in a different market environment from the one that
existed prior to March 2000. Given his skill level, I suggested he stick with
stocks in sustained uptrends if he was looking to trade only on the long side.
The drawback, of course, was that these stocks didn’t have the same kind of
movement potential he had come to know and love from the pre-March 2000 glamour
techs.
That said, let’s talk about bank stocks.
With the market weak throughout the day, numerous bank stocks are putting in
strong closes in anticipation of potential Fed rate cuts beginning early next
year. Look at
(
WFC |
Quote |
Chart |
News |
PowerRating),
(
USB |
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Chart |
News |
PowerRating) and
(
WM |
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Chart |
News |
PowerRating).
Countrywide Credit
(
CCR |
Quote |
Chart |
News |
PowerRating) is breaking out of its one-week range on
double-average volume.
The pattern is simple and straightforward. You’d want to look
for a new range to develop here with the breakout level becoming the new floor.
Being that CCR is not a high-tech momentum barnstormer, you might now have the
patience to wait for the next breakout. But you may study the trading range that
develops and look some swing-trading opportunities as it bounces around for the
next several weeks.
Have a great weekend,