Rock ‘Em, Sock ‘Em Markets
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
markets opening. Therefore, overnight events may alter the
outcome of these observations.
I
spoke with a fellow trader on Friday. He said, “Will
you look at this? They slam ’em one day, and they run ’em up
the next day.” This choppy daily action can make it
tough for the short-term trader. It can be frustrating to
watch a stock come roaring back the day after you got
stopped out. However, you can’t hold on, thinking that
“they’ll come back.” You have to honor your stops
and protect your capital. It’s better to get chopped up here
and there, and to live to trade another day, than it is to
get wiped out from being careless.
On
Friday, the Nasdaq opened on its low (a) and closed on its
high (b). On the surface, it looks like a nice trend day
rally. However, the intraday action was as choppy as the
recent day-over-day action that we’ve been seeing. A late
afternoon sell-off was met by eager buyers (or scared
shorts) as the index melted up during the last 35 minutes of
trading. I suppose this was the fun and games expected with
end-of-quarter window dressing and/or index rebalancing.
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On
any other Friday, this end-of-day rally would be bullish for
Monday. However, this rally was likely due in part to the
games mentioned above. Also, Monday will likely be light as
many traders have already begun their 4th of July holidays.
Therefore, unless you have money under management and are
expected to be in the office, you might want to consider
setting your stops and taking the day off.
Looking
to potential setups, Power One
(
PWER |
Quote |
Chart |
News |
PowerRating), on the
From Highs List, began rallying out of a sharp pullback
on Friday. This suggests that its fast uptrend remains
intact.
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Celgene
(
CELG |
Quote |
Chart |
News |
PowerRating), on the
And Handle Patterns List, sold off earlier on Friday,
but reversed to close well. This action may have shaken out
the weak hands and suggests that its uptrend may still be
intact.
Genome
Therapeutics
(
GENE |
Quote |
Chart |
News |
PowerRating), mentioned recently, still looks
like it has potential. Just wait for follow-through to the
upside, as it appeared to get off to a false start on
Friday.
On
the short side, Johnson Controls
(
JCI |
Quote |
Chart |
News |
PowerRating), mentioned
recently, closed poorly on Friday and looks poised to
challenge its recent lows.
Best
of luck with your trading on Monday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!