Keeping The Bench Filled With Hot Players
One of the main tools you should consider using
as a trader is a market-neutral watchlist. This list is comprised of
both long and short candidates. In the current challenging environment in which
the market has not yet adopted a clear directional bias, you should be prepared
for any scenario to unfold. Think of yourself as a coach who keeps recruiting
new hot players to sit on the bench, ready for you to call into the game at a moment’s notice.
The action of the past two days is a case in point. Wednesday, many of the
glamour issues broke down and the bellwethers sold off. Now as this is being
written on Thursday, the market is making a valiant effort at a comeback. But
we’re still mired in a range.Â
Now let’s look at an interesting setup. If you haven’t already done so, you might
want to include Adobe Systems
(
ADBE |
Quote |
Chart |
News |
PowerRating) on your watchlist.
I’ve mentioned ADBE before, but revisiting its chart is a good exercise, as
its ascending triangle has reached a potential milestone.
ADBE has had a phenomenal rise since early-February. During the Nasdaq
sell-off in March and April, Adobe was a standout relative strength performer.
In fact, it began the month of May at an all-time high. Thereafter, ADBE bounced
around in an ascending triangle and was range-bound. . .until today.Â
As this is being written, ADBE is breaking above the top of the triangle.Â
Traders will watch the close to see if ADBE manages to close in all-time-high
territory. If it does and techs manage to build steam over the next few
sessions, ADBE may finally get called into the game.
See you tomorrow,
Eddie