Pockets Of Strength

  • October 9, 2001
  • Dave Landry

 

On Tuesday,  the Nasdaq opened flat and
chopped lower to close poorly.

 

Although it wasn’t down as much as the Nasdaq,
the S&P also had a very choppy day.

 

So what do we do? The
big blue arrow still points down. However, there are some very strong
pockets of strength. For instance, many stocks in the insurance and
drugs/healthcare sectors are forming first pullbacks after their
recent melt ups. Look for Bow Ties, my favorite pattern,
to
find first pullbacks
here.
On the short side, the semis look like they are still in trouble. Many
stocks are setup as pullbacks from lows. Therefore, look to play both
sides but only look to go long in the strongest sectors.

Looking to potential setups, in the
drugs/healthcare, Express Scripts (ESRX)
looks like it has the potential to rally out of a pullback.

In insurance ($IUX.X),
Marsh & McLennan (MMC)
is set up as a Bow Tie.

 

On the short side,
Applied Materials (AMAT),
looks poised to resume its downtrend out of a pullback from lows.

Smoke ’em If You Got ’em

Last week, I mentioned Comerica (CMA)
in the weak bank sector. As you know, the stock imploded late last
week and on Monday. Whenever you are fortunate to be on the right side
of such “parabolic” moves (a), make sure you lock in a piece
of the profits. For more on money management, see my articles under
Trader’s Lessons.

 

There
are a couple of more thanks that I was unable to get in due to time
constraints Monday night. Special thanks goes out to my friend Vincent
Mao for his security efforts. I’d also like to think those Trading
Market staff members that I did not work with directly. To all of you,
I could tell by your weary smiles there was a lot going on behind the
scenes to make the show as smooth as it was. Most of all, I wanted to
thank those who attended. I’m sure I learned as much from you as you
did from me. I am humbled. 

Best of luck with
your trading on Wednesday!

Dave Landry

sentivetradingco@prodigy.net

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

“…Your
book was the best. I’ve read dozens of stock market books but when I
finished yours, something clicked. Thanks for writing it and your
column and I’ll see you in Vegas….”

Regards,

Dave (aspiring trend following moron) 

 

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