Pullback Opportunities
Yesterday the S&P 500 closed below the 1302.39 low of the high day
(1311.09), establishing a high swing point. Look for some downside follow-through today and
lots of
program activity with the triple witch coming on Friday. A pullback to the 1280-85 (the trading
range breakout level) would offer good setups in the some of the favored few names.
Schlumberger (SLB) gave good entry on a pullback to its 200-day moving average yesterday,
popping
to 59 3/4. The point is, you almost always get another chance in a stock, and it’s better for
short-term position trades to be above the 200-day moving average after the stock has clearly
signaled its direction.
Target Stocks Of The Day  I don’t know if there will be many continuation
opportunities today, but I’d say you’re more likely to get some oversold buy setups from
your five-minute charts because of program activity and downside follow-through from yesterday.
Consolidation, pullback, and narrow-range patterns in high relative strength stocks include
Uniphase [UNPH>UNPH], Network Appliance [NTAP>NTAP], Siebel Systems [SEBL>SEBL], Dell
[DELL>DELL], Intuit
[INTU>INTU], Tricon Global Restaurants [YUM>YUM], Abercrombie & Fitch [ANF>ANF], Cisco
[CSCO>CSCO],
Qwest Communications [QWST>QWST], and Vitesse Semiconductor [VTSS>VTSS].
Remember, if you get entry, these are all high-momentum stocks with high-octane potential.
They were selected from daily bar charts in conjunction with TradingMarkets.com’s Investigator
Relative
Strength screening process. As I’ve previously mentioned, entries from daily bar patterns are
generally above the prior day’s high, and sometimes above the prior day’s close.
Watch yourself today. Keep your helmet on, and look for that program activity.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click
on the link below to go to his new series of tutorial articles.