Happy Stock Selecting!
This weekend, I highly recommend that you come to
TradingMarkets.com and read Tsutae Kamada’s trading lesson “Leadership
Rotates…So Rotate With It.”Â
In it, Kamada points out how very important it is to be flexible and adapt to
changes in market leadership.Â
Many traders are aware that leadership rotates between different sectors and
groups, but this just winds up becoming lip service as they get addicted to the
glamour that certain groups hold. When those glamour groups tank, as happened
with the semis this past summer, traders who didn’t react fast enough got
slammed.
On the other hand, if you stayed on top where the leadership shifted, you
would have found that biotech, in spite of its volatility, comes up near the top.
Here’s a chart that may seem like a blast from the past, but it’s actually
recent history leading up to today’s price action.
In the current environment, it’s rare to see a stock that is not only trending
as well as Alza
(
AZA |
Quote |
Chart |
News |
PowerRating) is, but which is also generating as many tradable
patterns has this is. With today’s action, AZA is bouncing off support from
the lows of its four-day range. This follows through from last week’s surge from
a confluence of AZA’s 50-day moving average and a five-month trendline.
With Nasdaq woes mounting and glamour stocks becoming has-been stocks, AZA is
a good illustration of how very important stock selection is in your overall
trading strategy. It’s important to have a great arsenal of patterns. The
contributors to TradingMarkets.com do their very best to arm you with the best
ones. But all that is irrelevant if you don’t select stocks that have a strong
directional bias and a tendency to behave well when patterns form.
We’ll see you on Monday.
Have a great weekend and happy stock selecting!