Here’s my favorite way to trade breakouts
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
On Tuesday, the Nasdaq rallied slightly but began to trade sideways
ahead of the Fed. It rallied nicely on the announcement but then gave up some of
those gains going into the close. Nevertheless, this action has it closing near
the top of its sideways trading range. Â Â
The S&P was a little more impressive. Although it remains in a trading
range, Tuesday’s action has it closing at a new high for the year.Â
So what do we do? So far, so good. The indices look like they
want to break out of their trading range. However, don’t anticipate this or play
the breakout–wait for a decisive breakout and then look to play the first
pullback. In the meantime, focus mostly on commodity related areas since they
can trade independently of the indices.Â
As far as setups, Gerdau Sa Ads
(
GGB |
Quote |
Chart |
News |
PowerRating), in the strong steels (and let’s
face it, what good is weak steel?), looks poised to resume its uptrend out of
its first pullback since its recent base breakout.Â
Â
Weekly Lesson-Same Bat Time, Same Bat Channel
Where back on schedule this week: On Wednesday, 12/14/05, I will be doing my
weekly interactive lesson. So far, I plan on discussing current market
conditions, sticking with winners, and where I’m seeing opportunities. As usual,
I’ll also take
your questions on stocks or trading in general. Admission is free but limited
by the software. Email me if you need
instructions on how to join (the same each week).Â
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.