Nibble Only
On Monday, the Nasdaq opened flat and chopped sideways for
most of the day. Then, early in the afternoon, it began to sell off in
earnest. This action has it closing at its lowest level since early October.
The S&P also sold off to close at its lowest levels
since early October.
So what do we do? I think it’s too late in the present
cycle to establish new shorts. You’re probably be better off managing the ones
you already have while waiting for the next pullback. Therefore, look to nibble
on the long side. However, (at the risk of preaching) because you are
fighting the big blue arrows, stick with the
strongest issues in the strongest sectors and wait for entries.Â
Looking to potential setups, Province Healthcare
(
PRHC |
Quote |
Chart |
News |
PowerRating)
in the strong healthcare-hospitals group, looks poised to resume its uptrend out
of a pullback.
Mandalay Resort Group
(
MBG |
Quote |
Chart |
News |
PowerRating) appears
to have made a false breakout. However, sometimes stocks will make severalÂ
“fake outs” from low
volatility situations. Therefore, if this stock can take out today’s high
(Monday) it may be worth considering. Otherwise, avoid the stock.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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