Here’s One Sector That Has Survived Bad Markets
Looking to the indices, on Friday, the Nasdaq lapped higher
but quickly found its high and sold off hard. However, it found its lows in
early trading and generally worked its way higher for much of the day. It dipped
going into the close but still managed to close well.
This action has it testing, and so far holding, above its
recent breakout levels (circa 1685).
The S&P was stronger on a relative and absolute
basis.Â
This action has it bouncing from near the bottom of its trading range, which also corresponds with
its 50-day moving average.
Looking to the sectors, as one would expect, technology
finished flat to higher. This action has areas such as telecom, software and the
semis stabilizing–at least for 1-day. Outside of technology, many financial
related stocks including banks, asset management and broker/dealer (especially
regionals) bounced back. This action, so far, keeps their longer-term uptrends
alive. The cyclical stocks have done exceptionally well as of late, but, in
spite of the media celebration, I don’t see to much to get excited about here.
Only a few specialty areas such as education & training seem to remain in
solid longer-term uptrends.
On the downside, the homebuilders continued to slide. This
action further confirms that a top is in place here. The utilities bounced but
so far, only appear to be pulling back.
So what do we do? So far, the Nasdaq seems to have
dodged a bullet. The action in the S&P is also encouraging but it still
remains stuck in a sideways trading range. Therefore, at the risk of boring you
to death, you probably should continue to keep it light. On the long side,
stick with the stronger specialty areas (e.g. Education) until technology once
again begins to re-assert itself. On the short side, watch areas that have
already rolled over such as the homebuilders and utilities for opportunities.
Looking to potential setups, Career Education Corp.
(
CECO |
Quote |
Chart |
News |
PowerRating), in the aforementioned strong Education & Trailing Services
sub-sector, looks poised to resume its accelerating uptrend out of a pullback.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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