I Like Yahoo! — Do You?
On Wednesday, the Nasdaq opened weaker but quickly began to
rally. However, it found its high in early trading and began to sell off. It
found its low by mid-day and then chopped back and forth for the remainder of
the day. This action keeps it below resistance, circa 2100.
The S&P put in a similar performance but managed to
only lose a few points. So far, there still remains some overhead resistance
between it and new yearly highs.
^next^
So what do we do? In general, even with
Tuesday’s sell off, the sector action has been improving. Internet, for instance
has been exceptionally strong as of late. Others strong areas include (but not
limited to), manufacturing, HMOs, gaming, selected software, selected insurance,
and selected retail. However, since the market remains so overbought (see recent
commentaries), the chances are better than average that this correction is not
over. Therefore, wait to see how far it will take the indices before looking to
jump in. Also, keep in mind that the indices still remain below resistance. For
the non-trader types, a safer bet would be to wait to see if the indices could
make it back to their old (yearly) highs and stick before looking to
position.
Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating), in the aforementioned Internet sector,
looks like it has the potential to resume its strong uptrend out of a Trend
Knockout (TKO). However, wait for entries or at least some signs of strength
(e.g., opening gap reversal or a breakout of the opening range) since it was down
fairly hard on Tuesday based on an analyst downgrade.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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