Here’s Why I’m Bullish
On Friday, the Nasdaq opened soft but quickly found its low
and began to chop its way sideways. It finally gained traction late in the
day.
This action has it closing well, puts it nicely above its
50-day moving average, and it breaks it out of its short-term trading range.
The S&P put in a somewhat similar performance but
wasn’t nearly as impressive as the Naz (again).
This action keeps it above its 200-day moving average but
below short-term resistance.
In the sectors, overall, the action remains constructive.
This is especially true now that tech is joining in for the ride. The semis have rallied nearly 9% in the last two days. I’m not going to run out and call a bottom
here, but I think it’s a pretty good start! And, like the Nasdaq itself, many
other tech areas are breaking out to multi-month highs. This includes, but not limited to: telecom, internet, computer hardware,
and software. Outside of tech, Broker/dealer broke out to multi-month highs, extending its recent run out of a Bowtie/Cup and
Handle (see my column from 09/07/04 for more on this). Most of the rest of the financials
are also at or near multi-month highs. Other areas in uptrends include retail
(most) and selected manufacturing.
So what do we do? Of course, now that the
Nasdaq finally gets its butt into gear, the S&P begins to lag. No problem,
though. Since the overall sector action remains constructive, I think the path
of least resistance remains to the upside. Start putting together your shopping
list in those areas mentioned above.
No setups tonight. Since conditions continue to improve, we
should see plenty stocks setting up soon. If you took the Intuitive Surgical
(
ISRG |
Quote |
Chart |
News |
PowerRating)
trade, mentioned recently, make sure you trail a protective stop higher.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my newest and most advanced version of my Bow
Ties Strategy. Click
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