Remain Cautious If You Nibble

December 14, 2000
Dave Landry

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 opened flat (a) and after a brief blip up, it resumed its
downtrend and closed on its low (b).

Essentially,
from an index standpoint, nothing has changed.Â 3000-ish (c) remains resistance to the upside and the old lows (d)
remain a likely target to the downside.

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So what do we do?
Unless we get multiple buy signals on the Market Bias Page (which would suggest
a “bounce” play), I still see no reason to get too excited in here. At
least, not until the market can stabilize. Therefore, continue to keep it light
on the long side and consider a short or two.

Now that I’ve got
all my bearishness out of the way, there are a few stocks (e.g., the
financials/insurance and pockets of biotech) that are beginning to set up on the
long side. This is good news but no reason to bet the farm. Nibble only until
the overall market environment improves.

Looking to potential
setups, Astoria Financial
(
ASFC |
Quote |
Chart |
News |
PowerRating), mentioned Wednesday night on theÂ Proprietary
Momentum List, sold off earlier on Thursday (a) but recovered to close well.
This suggests that its strong uptrend remains intact.

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Scios
(
SCIO |
Quote |
Chart |
News |
PowerRating),
on the Pullbacks
Off Highs List, appears to have recovered from Wednesday’s probe lower. This
suggests that its uptrend remains intact.

Met Live
(
MET |
Quote |
Chart |
News |
PowerRating), also on the Pullbacks
Off Highs List, looks poised to rally out of a three-bar pullback/flag.

On the short side, Echostar Communications
(
DISH |
Quote |
Chart |
News |
PowerRating), mentioned recently and on the Pullbacks
Off Lows List, still looks vulnerable.

Professional
Detailing
(
PDII |
Quote |
Chart |
News |
PowerRating), mentioned Thursday night and on the Proprietary
Implosion List, still looks vulnerable.