Stay Picky
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.
On
Wednesday, the Nasdaq gapped lower (a) on the negative news about Cisco news,
blipped up, and sold off hard. It was down over triple digits at the low (b).
The good news is that it mounted a decent comeback late in the day.
Wednesday’s
action has the Nasdaq retracing more than half of its gains in 2001.
So what do we do? The
recovery late in the day is encouraging but not enough to get me excited enough to bet
the farm. Therefore, I think we remain in setup-by-setup-and- wait-for-entry
mode.
Looking to potential setups, Audio
Codes
(
AUDC |
Quote |
Chart |
News |
PowerRating), on the Pullbacks
Off Highs List, looks like it has the potential to rally out of a low-level
cup and handle. Just don’t overstay your welcome here as there is longer-term
overhead resistance.
Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating), also on the Pullbacks
Off Highs List, also looks like it has the potential to rally out of a
low-level cup and handle–especially if it can take out Tuesday’s pivot high
(a).
Electronics For Imaging
(
EFII |
Quote |
Chart |
News |
PowerRating), Coherent Technologies
(
COHR |
Quote |
Chart |
News |
PowerRating) and
Computer Associates
(
CA |
Quote |
Chart |
News |
PowerRating), all mentioned Tuesday night, held up well in
spite of Wednesday’s poor action. This suggests that their uptrends remain
intact.
No Tickie, No Tradie Award
Today’s no tickie, no tradie award goes to International Rectifier
(
IRF |
Quote |
Chart |
News |
PowerRating),
mentioned Tuesday night. The stock got creamed on Wednesday (a) but fortunately,
never got anywhere near a possible entry (b). Wait for follow through,
especially in uncertain environments.
Best
of luck with your trading on Thursday!
To my bride: Happy Third Anniversary!
P.S. Reminder:
Protective stops on every trade!
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