Home Runs, Smoking And Pigs
On Wednesday, the Nasdaq lapped higher and initially
chopped its way mostly higher. Then, early afternoon, it sold off hard. This
action has it closing poorly and suggests the index is poised to continue its
downtrend out of a pullback from lows.
The S&P stalled out after tagging the top of its recent
range. This action suggests the bottom of its range could be challenged.
So what do we do? The early fake higher followed by a poor
close, combined with negative action in much of the techs (e.g., software, semis,
Internet etc..), is keeping my commentary the same: Continue to look for
shorting opportunities in tech.
Looking to potential setups, Cabot Microelectronics
(
CCMP |
Quote |
Chart |
News |
PowerRating), in the vulnerable semiconductor sector, appears to be stalling out
after hitting an area of overhead resistance(a). This action suggests that it will
continue its downtrend out of a pullback from lows.
For those who still have big ones*, volatile Nvidia
(
NVDA |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night, formed an outside day down on Wednesday. This action
suggests its rollover remains intact.
Coach, It looks like a home run.
Recently, I had discussed that breakeven plus
would be a good place for a stop (after taking partial profits) on Coach Inc.
(
COH |
Quote |
Chart |
News |
PowerRating)
(see archives on the right side of this page for more details). I
also discussed that the recent
lows (a) would be a good place for a trailing stop. On Wednesday, the stock
gapped opened and rallied sharply (b). When blessed with such a huge windfall,
make sure you continue to take profits. Looking to the technical picture, this
stock should NOT come back into the area of its breakout/old highs. Therefore,
let’s assume that 47 would be a good area for a trailing stop on any remaining
shares.
Smoke ’em If You Got ’em
Emulex
(
EMLX |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night as a potential
short, was down sharply on Wednesday. At the risk of preaching, when blessed
with such a quick profit, don’t be shy about locking in a piece (and tightening
your stop on your remaining shares to breakeven). Said another way, “smoke
’em if you got ’em”.
Pig Update
Congrats to Roger S. His name was randomly drawn from
correct answers for a free one-month subscription to my trading
service. If you angry ’cause you didn’t get picked, don’t blame me, I didn’t
pick it. Andy did. Feel free to email him at andy@mgordonpub.com.
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*Accounts.
“….Give a person a fish or teach them to fish I believe is an appropriate metaphor – I know traders who will lose 10k in a day but balk at paying $100 bucks for your fishing pole- best book in my trading library. Column continues to be great, no bs.Â
Thanks,….”
Pete….
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