Look To Buy Stocks On Monday But Only If You See This

Why “Smoking” Isn’t Always Bad For You

As you know, I always preach locking in partial profits
when a swing trade moves in your favor. For example, Mobile Telesys
(
MBT |
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Chart |
News |
PowerRating)
,
mentioned recently(a), traded over 3-points higher since then(b)–and then
subsequently reversed on Friday. When blessed with a quick profit,
especially in an overbought market, don’t be afraid to “smoke ’em if you
got ’em”–lock in a piece and tighten your protective stop to breakeven on
the remainder.

Looking to the indices, on Friday, the Nasdaq opened flat
but quickly began to sell off hard. The selling slowed by mid-day but resumed in
late afternoon trading. This action has it closing poorly.

The S&P put in a similar performance.

So what do we do? Friday’s sell off has a lot
of sectors, like the market itself, correcting uptrends after just hitting new
52-week highs. This action sets up a plethora of pullbacks and/or Trend Knockouts (email me
if you need the rules). Based on this, I now feel much better about buying this
market. However, there is one caveat: wait for entries. For those new to trading,
this means waiting to see if the stock can trade above the prior day’s high
before looking to position.

Looking to potential setups, Ryland Group
(
RYL |
Quote |
Chart |
News |
PowerRating)
,
mentioned Friday and in the strong homebuilders, still looks like it has the
potential to resume its accelerating uptrend out of a pullback.

Best of luck with your trading on Monday!

Dave Landry

dave@davelandry.com

P.S. Reminder: Protective stops on
every trade!

P.P.S. Learn my best swing
trading strategy in my new interactive CD-ROM. Click
here
now for details.