Old Friends/Obvious
On Monday, the Nasdaq opened mixed but quickly began to
sell off. Then, after some mid-day drifting, it resumed its slide. This
action has it closing poorly and suggests that it will challenge its recent
lows.
The S&P also sold off hard out of a pullback. It too looks
poised to challenge its recent lows.
So what do we do? Obviously*, the market is resuming its
downtrend. However, based on the magnitude of Monday’s move, it’s also quickly
becoming oversold. Therefore, look to short but stick with either issues in deep
pullbacks or stocks in sectors that have recently begun to rollover (see below).
Looking to potential setups, not much has chanced since I
was last here on Thursday: Previously strong sectors such as
healthcare-health care plans
(
$HMO |
Quote |
Chart |
News |
PowerRating) that have recently broken down, may continue to play catch up to the rest of the market.
Considering the above, Oxford Health Plans
(
OHP |
Quote |
Chart |
News |
PowerRating),
mentioned last Thursday, still looks poised to continue its meltdown.
Keep An Eye On Old Friends
It often pays to keep an eye on stocks that you have been
recently following. This is why I recommend saving my old commentaries and
trading services. Many times, stocks will either trigger several days later or
set up again. For instance, notice our old friend Novellus Systems
(
NVLS |
Quote |
Chart |
News |
PowerRating),
mentioned last week (a). On Friday, it set up again as a TKO/pullback.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*Obvious to everyone except those who don’t or
simply refuse to believe in blue arrows.
P.P.S. Due to a scheduling conflict, I will not
be doing my commentary on Friday.
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Galvin
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