Get Ready To Buy Soon, But Short These Two Areas In The Meantime
On Thursday, the Nasdaq chopped back-and-forth but did
manage to end nicely in the plus column. This (and recent) action has it
clearing short-term overhead resistance. I’m still concerned about longer-term
overhead resistance, but hey, so far, so good!
Â

The S&P put in a similar performance. It too is
pushing its way through overhead resistance.

As far the sectors, I finally have some good news to
report. Many are breaking out of trading ranges, making trend
transitions, or are now in bona fide uptrends. This includes (but not
limited to), Internet, biotech, selected telecom, software, banks,
broker/dealer, and the semis.Â
So what do we do? As implied above, the
action continues to improve. So should we buy? Yes, but not yet. Since the
market is so overbought, I would wait for a pullback and then look to get long if
the trend resumes. In the meantime, on the short side, avoid strong areas
and continue to focus on weak areas such as metals & mining and the
energies.
As far as setups, Alcan Inccue Metal Group
(
AL |
Quote |
Chart |
News |
PowerRating),
mentioned recently and in the aforementioned weak metals, is once again
set up as a pullback.Â

Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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