If You See These Three Things, Look To Buy On Friday
Looking to the indices, on Thursday, the Nasdaq opened
firmer and after briefly chopping around, it began to sell off. However, it
found its low late in the morning and began to rally. It did gave back some of
its gains going into the close but still managed to close well. This action sets
up the index as a pullback.
The S&P put in a similar performance but wasn’t quite
as strong. This action puts it back to near its prior breakout levels. Â
Looking to the sectors, most of tech, like the Nasdaq
itself, finished higher after tailing lower. This action set up pullbacks in
areas such as computer hardware, selected telecom, Internet, and areas of biotech
(e.g. IBB,CELG). This reversal also seems to have saved and sets up deep
pullbacks in the recently hard hit software and semiconductor sectors. Outside
of tech, gold traded lower but reversed to close well and in the plus column.
This action sets up a pullback here too. Retailed bounced but many areas
still remain questionable
So what do we do? One day can make a big
difference. The fact that the indices (and most sectors) reversed after tailing
lower suggests that the market has a chance to resume its uptrend. And, since
the Nasdaq and representative tech sectors are set up, those areas are probably
the best place to look for opportunities. Follow through will be key
though. Therefore, make sure you wait for entries, market confirmation and
sector confirmation.Â
Looking to potential setups, Cymer
(
CYMI |
Quote |
Chart |
News |
PowerRating), in the
semis, tailed lower (a) but reversed to close well (b). This
“knockout” action suggests that its longer-term uptrend remains
intact.
 Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…..I have read your book several times and I found it very empowering to me. My trading improved quite a lot….Grateful for your help…..”Â
George B.
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