Not Too Excited
On Wednesday, the Nasdaq lapped slightly, sold off to test
Tuesday’s lows and then generally worked its way higher.Â
This action puts the index back above the 1900 support
level but it still remains below its 50- and 200-day
moving averages.
The S&P bounced from a support level.
So what do we do? The media
sure seemed excited about today’s bounce. Me? I’m not so sure. We’ve seen this
up 2-3% one day only to be down the next quite a bit as of late. I would remain
cautious and wait until the indices can get back above their 50 and 200-day
moving averages and stabilize before getting too excited. In the meantime, look
to play both sides.
Looking to potential setups, 3-M
(
MMM |
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PowerRating), mentioned Tuesday night as a Bow Tie, still looks vulnerable.
Still On The Trial
When I last left off, I was
showing how a trailing stop could (hopefully) be used to capture an
extraordinary gain. I was using Abgenix
(
ABGX |
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PowerRating), a Bow Tie short mentioned
recently, as an example. If you haven’t read the recent archives, now might be a
good time to do so. We I last left off, I discussed that the trailing stop was lowered to
just above last Friday’s high which also corresponded with a recent high (a). As
mentioned on Tuesday, this
level should not be hit if the stock is in a solid downtrend. On Wednesday, the
stock bounced but, so far (and just barely), remains below this level.Â
Best of luck with
your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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