Signs Of Light?
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.
Trader’s
Galleria has recently added more products. Check it out and pre-order my upcoming book on swing
trading at a 20% discount while you’re there (No shame is still my middle name).
On Wednesday, the Nasdaq lapped lower (a) and after sliding a bit,
mounted a rally. When it took out Tuesday’s high, it looked like it had the potential to be a decent day. However, it stalled out and ended up essentially where it started.
width=”470″ height=”320″>
The lack of follow through is disappointing. As I mentioned
Tuesday night, this market has no price persistency except to the
downside.Â
On the bright side, for the first time in quite a while, setups are
beginning to work and follow through. For instance,
(
PDLI |
Quote |
Chart |
News |
PowerRating) and
(
IDPH |
Quote |
Chart |
News |
PowerRating) (both from Monday) were up
for the second day and new setups such as
(
OSIP |
Quote |
Chart |
News |
PowerRating) and
(
HNCS |
Quote |
Chart |
News |
PowerRating) had decent first
day gains.Â
BTW, for those of you who weren’t in Vegas, make sure you “sell half
and more your stop to breakeven” when you have a winning swing trade on your hands.
So what do we do? The fact that some setups are
beginning to work outside of defensive issues suggests there may be some light
at the end of the tunnel. However, there’s still no need to bet the ranch.
Continue to focus mostly on the defensive issues such as drugs (see recent
Option Outlooks).
Looking
to potential setups, Schering Plough
(
SGP |
Quote |
Chart |
News |
PowerRating), a drug stock on the Pullbacks
Off Highs List, looks like it has the potential to rally out of a pullback.
PeopleSoft
(
PSFT |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, looks poised to resume its strong uptrend.
NetIQ
(
NTIQ |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night, is
just shy of taking out its recent pivot high (90).
On the short side, International Business
Machines
(
IBM |
Quote |
Chart |
News |
PowerRating) (I bet you thought I didn’t know the real name), on the Pullbacks
Off Lows List, appears to be stalling out in the area of its recent gap
down. This suggests its downtrend remains intact.
Best
of luck with your trading on Thursday!Â
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!