On Your Toes

  • June 20, 2001
  • Dave Landry

 

On Wednesday, the Nasdaq gapped lower on the open,
but immediately began to rally. However, by late morning, it began to
sell off again. Then, late in the day, it found its low and rallied to
close well. In other words, it was all over the place, but finished
well.

The 50-day moving average looks like a potential
target to the upside. When (or if) it gets there, notice how it
behaves. If it stalls out and rolls over, this may be time to fire off
a few shorts. If it can get above it and stabilize, then the long side
may be worth considering.

 

The S&P had
similar choppy action,
but also managed to close well. This looks like its setting up a
handle for an inverted cup and handle formation. Watch the 50-day
moving average here too.

 

So what do we do? It’s time for us to be on our
toes now that the indices have begun to retrace. If they begin to roll
over again, it may set up opportunities on the short side. For now
though, nibble only on either side and wait to see where this rally
will take us.

Looking to potential
setups, Digital Insight (DGIN),
on the Internet
Fab 5 List, (anyone remember that list?), looks poised to continue
its uptrend out of a pullback.

On the short side,
Capitol One Financial (COF)
looks poised to continue its rollover out of a Bow
Tie.

Random Thoughts

Thanks for the kind
words on yesterday’s comments: “the markets will always be there.“
I
was amazed at the amount of people that felt like they had to trade
everyday. Remember, as a private trader, you have utmost flexibility
in when and how you trade. That is one of the main advantages that you
have over the institutions.

No Tickee, No
Tradee

Anyone see my nice
call on Veritas–NOT! The good news is that it didn’t trigger. Wait
for entries.

Best of luck with
your trading on Thursday!

Dave Landry

Questions? Comments?
Drop me a line at sentivetradingco@prodigy.net

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

“…I
would like to thank you for your excellent book. After reading it, I
said wow.. Finally, there is light in the tunnel!…..

Dan S.

Â