Play Both Sides?

May 2, 2002
Dave Landry

On Thursday, the Nasdaq opened slightly lower but began to
rally. However, it quickly found its highs and worked its way lower throughout
the day. This action has it closing poorly and near its recent lows.

The S&P also reversed after probing Wednesday’s high.
This action sets up a pullback from lows and suggests the index will challenge
those lows.

So what do we do? The bias is down but it’s still choppy
enough to consider playing both sides. Just make sure you stick with the
strongest issues in the strongest sectors on the long side. Not matter what you
do, you might want to keep it light considering the nature of the present
market. And, of course, wait for entries.

Looking to potential setups, Mandalay Resort Group
(
MBG |
Quote |
Chart |
News |
PowerRating),
in the strong gaming-resorts group, is becoming a low volatility situation.
Watch for a potential breakout to the upside.

For aggressive traders, volatile Cabot Microelectronics
(
CCMP |
Quote |
Chart |
News |
PowerRating),
mentioned recently and in the vulnerable semis (notice how they look poised to
break support), still looks poised to resume its meltdown out of a Trend
Pivot Pullback.