Really Really Oversold
On Tuesday, the Nasdaq opened flat and after a brief blip
higher, generally chopped its way lower throughout the day. It did bounce late
in the day but still remained in the minus column and at its lowest level since
last October.
The S&P sold off harder. This action has it closing
poorly and also at its lowest levels since last October.
So what do we do? Well, in case you slept though the day,
the market become even more oversold on Monday. This keeps me in the
“damned if you do and damned if you don’t” camp. At the risk of boring you, this
means that if you buy, oversold will become really really* oversold. And, if you
short, of course, it’ll bounce. Therefore, I’d tread lightly not matter what you
do.
Looking to potential setups, Lincare Holdings
(
LNCR |
Quote |
Chart |
News |
PowerRating),
in the strong health services sector, looks like it has the potential to resume
its uptrend out of a pullback.
Walk Through
On Friday (see archive), I was walking through a trade in
Tenet Health Care
(
THC |
Quote |
Chart |
News |
PowerRating). When I last left off, the stop was moved to a
three-bar low/near the entry. On Monday, as you can see, this area got taken out
since the stock got whacked. As you can see, money management is important.
Without it, a small loss could have been much bigger.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
*The donkey was from Shrek. I’ll have several winners
picked over the next few days. I’ll also reply to those who had follow-up
questions.
“………I have read your book over a dozen times and I am still learning new things. Thanks for making me realize that I am a “method” man and I have since changed my ways increasing my success greatly….Thank you again for writing a terrific book……”
Anthony P.
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