Don’t Pick Bottoms
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
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
On
Wednesday, the Nasdaq lapped slightly lower (a) and sold off slightly early on.
It then mounted a decent rally to close on its high (b). Although the
turnaround was impressive, the index failed to take out Tuesday’s high (c).
It still looks like we’re in pullback from lows mode as the
longer-term trend remains down.
Based on my unofficial survey, it seems that everyone is
still trying to pick a bottom/call a low. Was last Wednesday the low?
Once again, I don’t know and don’t really care. As a momentum swing trader, I
can assure you that I will be wrong on the last pullback from lows. With that
said, I’m willing to stick to my guns and trade the trend until proven
otherwise. After all, I can’t let my team of 6-year old analysts down!
Looking to potential setups, About.com
(
BOUT |
Quote |
Chart |
News |
PowerRating), on the Internet
Fab 5 List (we probably should have renamed this list to “Flab 5”
earlier this year), looks like it has the potential to break out of a low-level
cup-and-handle-ish formation. Â
On the short side, Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating), on the
Pullbacks
Off Lows List, looks poised to continue its strong downtrend out of an
inverted cup-and-handle.
Amphenol Corp.
(
APH |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night, still looks vulnerable.
Aether Systems
(
AETH |
Quote |
Chart |
News |
PowerRating), on the Trading
Where The Action Is List, looks poised to resume its downtrend out of a
three-bar pullback from lows.
Best
of luck with your trading on Thursday!Â
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
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