Here Are Three Things That You Might Want To Do
Looking to the indices, on Wednesday, the Nasdaq opened
soft and initially continued lower. It found it low fairly early, consolidated,
and then begin to rally around mid-day. However, the rally quickly fizzled and
the index traded sideways for the remainder of the day.
It remains below its 50-day moving average and below
overhead resistance (circa 2100).
The S&P put in a somewhat similar performance but
managed to close in the plus column. So far, it remains in a sideways trading
range. The old highs, circa 1160, remain resistance here.
So what do we do? When you’re stuck in a
trading range like this, you have to do one of three things, 1) Not
trade, 2) Trade in commodity related stocks that can trade contra to the
indices (provided, of course, that stocks themselves are in trends), or 3)
Trade at a reduced size, focusing only on those areas that have been
outperforming the market Since #1 is self explanatory, let’s focus on 2 and 3.
In the commodity related stocks department, the energy stocks have been doing
very well lately. In the strong sectors that have been outperforming the
markets, there are only a few that really stand out in my opinion (I’m not
allowed to give the opinion of others). These include selected health services,
gaming, and selected retail (e.g. department stores).
Looking to potential setups, Sunoco
(
SUN |
Quote |
Chart |
News |
PowerRating), in the
aforementioned strong energy sector, looks like it has the potential to resume
its strong uptrend out of a pullback.
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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