How To Enter Or Exit Stocks Ahead Of News
An
afternoon bounce back faded near the close. The S&P managed to
finish barely positive as the Dow and the Nasdaq were slightly in
the red. I found the fact that the NDX continued to lag bothersome. While
the rest of the market rallied in the afternoon, the NDX never managed to
break its morning lows. The S&P and Dow are closing in on their
highs, but without confirmation from the Nasdaq, it leaves any rally in
doubt.
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So often you hear it said that
technicals lead fundamentals. I’ve seen it over and over where a move in a stock
precedes the news. A real clear example of this occurred this week.
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On Monday I looked at a
breakout in AMX Corp (AMXC). The stock broke out on strong volume and
offered a few opportunities for entry. An updated daily chart is below.Â
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What I didn’t know at the time
was why the stock broke out. That was learned Tuesday morning when the
announcement was made — AMXC is being acquired for $22.50 in cash. Apparently,
this announcement was not a well kept secret. By using technical analysis in
your trading, you’ll find that you’ll occasionally be able to enter or exit
stocks ahead of news announcement such as this.
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Sector Watch
Since this rally seems to be
struggling every step of the way, therefore I wouldn’t be surprised to see a
pullback soon. Two sectors that have lagged until recently, but are now a bit
overbought short-term are Semis and Internets. I would expect them
to provide some nice shorting opportunities if a pullback does occur soon.
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Best of luck with your trading,
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Rob
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