Different Names, Same Setups
Leadership rotation is a part of life in the markets
and it’s important to not fall in love with any one sector or group. Many
traders learned this the hard way with biotechs in March and April of 2000 and
more recently with the semis.
Still, that doesn’t mean that you have to stop trading or change your
tactics. It just means that your watchlist must be in a continual state of flux and
that yesterday’s favorites must give way to a young crop of fresh candidates.
You’ve probably seen a chart like this one of Reliant Energy
(
REI |
Quote |
Chart |
News |
PowerRating) many
times over the past several months…
…but you’ve seen other names such as ARBA, SDLI, and SUNW
attached to it. As you can see, as happened with many of the tech glamours in
previous months, REI has been locked in a familiar uptrend along its 20-day
moving average making upward progress by breaking out above a succession of
trading ranges. So today, we’re seeing this kind of action in energy stocks.
Enjoy it until the baton gets passed to another group.
Tomorrow,