How To Position Yourself For A Homerun
Smoke ’em If You Got ’em
Home Depot
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PowerRating), mentioned recently, has moved up nicely
since then. Remember, when blessed with a quick profit, make sure you lock in a
piece and move your trailing stop on your remaining shares to breakeven. This
way, you have a chance of a homerun on those shares. And, the worst you can do,
barring overnight adverse gaps, is a scratch on the remaining shares.
Looking to the indices, on Tuesday, the Nasdaq opened
firmer and initially traded higher. It then drifted for much of the day before
rallying strongly into the close. This action has it closing well and has it
closing in on its old highs.
The S&P put in a similar performance. It too closed
well and is closing in on its old highs.
So what do we do? The nice follow through to
upside that we saw on Tuesday suggests that the uptrend of the indices (from
March) remains intact. However, since my methodology generally requires a
pullback, I’m not seeing any new longs setting up. Therefore, manage what you
have–take partial profits and trail stops. Also, since we could be bumping up
against the old highs soon (potential resistance), don’t completely forget about
the short side. Just focus on the weaker areas such as regional air, biotech and
consumer non-durables. And, wait for entries since the tape was so strong on
Tuesday.
No setups tonight.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Learn my best swing
trading strategy in my new interactive CD-ROM. Click
here now for details.