No TV Until You Do Your Homework
The more I learn about trading, the more I see the
value of doing your homework and formulating a unique plan every single day
before the market opens. When you do that, you come to table with the
stock symbols and pattern setups already in hand. You merely wait for the
window of opportunity to present itself, rather than chasing after every Tom,
Dick, and PMCS.Â
Two of the stocks you might have gotten out last night’s homework are First
Health Group
(
FHCC |
Quote |
Chart |
News |
PowerRating) and Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating).
Like good cigars, good trends often have their own distinct flavor. FHCC is
smooth and full-bodied. Typically, I look for a stock to ratchet up by breaking
out of a succession of trading ranges in stair-step fashion. FHCC is steadily
going up what appears to be a smooth ramp–along its 20-day moving average.
To the delight of swing traders, the 20-day moving average appears to have been
providing good entries. Caution is warranted, however. You never know when these
“gifts of heaven” morph into land mines for the unwitting trader.
In my Nov. 16 “Chart of the Day,” I talked about how QCOM was
breaking out of a base on good volume. As you can see by the current price
action, QCOM seems to be stabilizing above the breakout level and building a new
trading range there. That, along with the institutional binge buying evidenced
by the recent price/volume surges we’ve been seeing is mighty constructive. This
could be an FHCC-like trend in the early stages.
Till Wednesday,