Range-Bound
face=”Arial, Helvetica”>Due to a scheduling conflict, Dave
Landry will be unable to write his Stock Trading Outlook
tonight. Tonight’s column is written by TradersWire’s Duke
Heberlein. Dave will be back on Monday, June 26.
Yaaawwwwnnn! A big
snooze is the only way to describe Friday’s market. In a
carbon copy of Thursday’s action, the index opened at its
high, drifted lower, and closed near the low. This activity
puts the Nasdaq right back into its 11-day trading range
(a).
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It
doesn’t take a genius to see that there is a great deal of
uncertainty in the markets. Oil prices are sky high, bond
yields are increasing, and let’s not forget that the
venerable Mr. Greenspan and Company are meeting next week to
decide if more rate hikes are needed to wage war on
inflation. Add all of these together, and you get the big
players standing on the sidelines: No one is stepping up
until the market stabilizes.
This
is a difficult environment. What it means for us as traders
is to use stops for protection, to lock in profits, and to
not get married to positions. Continue to look for plays on
both sides of the market. When it comes to long candidates,
look for issues that held up during Thursday’s and Friday’s
down days: Stocks that show good relative strength during
rough market activity often explode when the market turns.
Looking
ahead to Monday’s setups, PairGain Technologies
(
PAIR |
Quote |
Chart |
News |
PowerRating)
has formed a three-bar pullback; closed on Friday in the top
of its range (a); and appears to have the potential to
resume its longer-term uptrend.
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Novoste
Corporation
(
NOVT |
Quote |
Chart |
News |
PowerRating), on both the
Momentum List and the
60-Day Highs List, broke out on a large expansion of its
daily trading range.
Medarex
(
MEDX |
Quote |
Chart |
News |
PowerRating), on the
List, is pulling back into a narrow downward range. It
sold off early Friday, but reversed and closed strongly, so
it could stage a breakout from this range. Netegrity
(
NETE |
Quote |
Chart |
News |
PowerRating),
on the same list, is a Trend Knock Out. (This is when a
stock sells off and then takes out at least its prior two
lows and reverses to close well. This activity often shakes
out the “weak hands,” thus clearing the way for
the stock to trade higher.)
Corning
(
GLW |
Quote |
Chart |
News |
PowerRating) is trading in a four-day flag and could make a run
toward its old highs.
On
the downside, Grainger
(
GWW |
Quote |
Chart |
News |
PowerRating), on the
List, looks poised to resume its downtrend, and
DoubleClick
(
DCLK |
Quote |
Chart |
News |
PowerRating), on the
From Lows List, looks as though it could test its old
lows.
Best
of luck with your trading Monday!
Duke
Heberlein
P.S.
Reminder: Protective stops on every trade!