Here’s What You Should Do On The Long And Short Side
On Wednesday, the Nasdaq traded back-and-forth in early
trading but began to rally by late morning. Then after consolidating in
afternoon trading, it resumed its rally going into the close.
This action has it closing well and puts it back above its 200-day
moving average (the blue line below).
Ditto for the S&P.
So what do we do? The picture is looking much
better now that we have some follow through from the recent breakout. My only
concern is the fact that the market is overbought at these levels.
Therefore, trade at a reduced size until we see an orderly pullback. On the
short side, look for opportunities in areas such as the homebuilders that are
breaking down from high levels (potential First Thrust patterns).
As far as setups, America Movi
(
AMX |
Quote |
Chart |
News |
PowerRating), in the strong
wireless (and let’s face it, weak wireless sucks!), looks like it has the
potential to resume its uptrend out of a Trend Knockout (TKO). Just wait for an
entry (since it was down hard on Wednesday) and heed the above warning about the
market being overbought.
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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