Let The Dust Settle
On Friday, the Nasdaq opened flat and after chopping around
early on, sold off to new lows. It then backed and filled for most of the day, before
mounting a late-day rally. Finally, it drifted lower into the close but still
managed to close fairly well.
The S&P put in a similar performance.
So what do we do? Friday’s turnaround is somewhat
encouraging. I use the word “somewhat” because it was unable to close on its
highs. This leaves us with a mixed, and still oversold environment. Therefore,
I’m repeating my thoughts from Thursday’s commentary: This is one of those “damned if you
do and damned if you don’t” environments. If you try to short, the market will
bounce. And if you try to go long, the oversold will become more oversold.
Therefore, no matter what you decide to do, tread lightly.
There were very few meaningful setups tonight. For me, this
is usually a sign that I should remain on the sidelines. With that said, one of
the few stocks that looked somewhat interesting was
Beazer Homes
(
BZH |
Quote |
Chart |
News |
PowerRating),
in the strong homebuilders (and let’s face it, no one wants to leave in a weak
home*). The stock looks like it has the potential to rally out of a pullback.
However, use caution as some issues in the sector are beginning to show signs of
distribution.
Coaching You Through Coach
Recently, I had discussed that breakeven plus
would be a good place for a stop (after taking partial profits) on Coach Inc.
(
COH |
Quote |
Chart |
News |
PowerRating)
(see archives on the bottom right side of this page for more details). On
Tuesday night, I discussed that the recent
lows (a) would be a good place for a trailing stop. This way, barring overnight gaps, the worst you
could do was a slight profit on the remaining shares. And, as discussed
recently, it would allow for a potential home run. The stock appears to be
building a base right above this level. Therefore, we’ll keep the stop in place.
Best of luck with
your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*Two out of three little pigs learned their lesson
here.
“……I want to send you this note to thank you for the excellent book that you
have written. I have enjoyed so much reading your book and I appreciate for your hard work, creativity and professionalism. Your book is a must-read
for every serious trader. It is simple, concise and to the point, but also full of useful detail. Again, thank you for such a wonderful job….”
Pablo
(Argentina)
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