Premature Celebration?
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
On Thursday, the Nasdaq gapped higher (a), quickly found
low and resumed its rally. This action has it closing well (b).
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Many are celebrating “the bottom.” Me? I’m not so
sure. It seems that we didn’t get the “normal” wash out,
run-for-the-hills panic associated with a market bottom. Let’s see if we can go
a few days without returning to the old lows before getting too excited.Â
One thing is for sure, volatility appears to be here to
stay. Make sure you are honoring your stops.
Looking
to potential setups, The TJX Companies
(
TJX |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, has formed a high level “micro” double bottom
right above the area of its recent breakout (a). This suggests its uptrend
remains intact.
Â
On the short side, Coherent
(
COHR |
Quote |
Chart |
News |
PowerRating), on
the Implosion
10 Technology List, appears to be stalling out in just its second day off
major lows. This suggests it remains extremely weak.
Cubist Pharmaceuticals
(
CBST |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Lows List, has formed a Trend Pivot Pullback. The stock looks
poised to resume its strong downtrend, especially if it can take out (trade
below) Wednesday’s pivot low. Scientific Atlanta
(
SFA |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday
night, is a similar pattern.
Best
of luck with your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!