Is it time to buy like its 1999?
Dave Landry is principal of Sentive Trading, a money management firm, and a
principal of Harvest Capital Management. Mr. Landry is the author of two top
selling books,
>Dave Landry’s 10 Best Swing Trader Patterns And Strategies and
>Dave Landry On Swing Trading.
If you would like a free trial to Dave’s Nightly Swing Trading Alerts Report
On Friday the Nasdaq initially sold off but it found its low in early
trading. It then essentially rallied for the remainder of the day.
The Ps put in a similar performance.
So what do we do?
The market looks good. Sectors,
especially technology, also look good. So, should we buy like it’s 1999?
Well, maybe not just yet. The market has become overbought very quickly
and is due to correct. It’s the old damned if you do and damned if you don’t
situation. If you don’t buy it, overbought becomes even more overbought. If you
do buy it, then it corrects. Therefore, exercise caution (e.g.
maybe trade at a smaller size) until we see some signs of a pullback.
As far as setups, Redback Networks
(
RBAK |
Quote |
Chart |
News |
PowerRating), not to be confused
with the guys who put the network in my double-wide: “Redneck
Networks”, looks poised to resume its recent rally out of a pattern I call
a First Thrust.
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.