Still Nibbling
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.
face=”Arial, Helvetica”>Every time I talk with Kevin
Haggerty, I get some very useful information regarding
trading. The depth of his knowledge and experience is truly
amazing. In my opinion, he is one of the best traders in the
world. Therefore, I was honored when he asked me to assist
him with his upcoming seminar in New York. If you would like
to spend two intense days learning from Kevin (and meet me,
of course!), be sure to sign up for the seminar. Call
1-888-543-8003 to register, or
here for more information. I hope to see you there!
face=”Arial, Helvetica”>UPDATE: Only a few spots left. Be
sure to sign up soon!
At
the time this is being published, the S&P Globex futures
are trading 2 points higher and the bond market is trading
down 2 ticks.
On
Thursday, in spite of the Nasdaq 100 futures being up nicely
before the open, the Nasdaq quickly found its high (a) after
gapping higher. Then, after some bouncing around, it grinded
mostly lower for the rest of the day. This action has it
closing near its lows (b).
As
you’ve heard me preach before, beware of the pop-up opening
when futures are up overnight. In most cases, you’re
better off waiting a few minutes to make sure the rally
sticks.
It
looks like the index is setting up a trading range (c)
between 3,884 and 3,725. However, this talk may be only
academic, as Friday’s PPI report could easily break us out
of this range.
width=”470″ height=”320″>
I’m
disappointed that the rally didn’t hold, but I don’t think
Thursday’s action is incredibly important in the general
scheme of things.
As
mentioned recently, tech continues to shape up. Tonight
(Thursday), the
Momentum List remains tech-heavy, with only one non-tech
name.
On
Wednesday, I talked about nibbling in technology. I
still feel the same way. However, keep your positions on a
short lease — that is, use tight stops and be quick to take
profits — until we get some follow-through to the upside.
Looking
to potential setups, Allergan
(
AGN |
Quote |
Chart |
News |
PowerRating) and ICN
Pharmaceuticals
(
ICN |
Quote |
Chart |
News |
PowerRating), both mentioned recently and both
on the
From Highs List, still look like pullbacks with
potential. Just wait for follow-through here, as both
stalled out after initially rallying.
Cardinal
Health
(
CAH |
Quote |
Chart |
News |
PowerRating), also on the
From Highs List, is a pattern I call a Trend Pivot
Pullback. This is when a stock in a pullback has a one-day
false rally. The theory is that this draws in and
subsequently shakes out the fast money. This action can
clear the way for the stock to trade higher. Just wait for
the pivot high (a) to be taken out.
width=”470″ height=”320″>
For
you breakout players, stocks in fast moves often consolidate
only a few days before heading higher. With that said, MIPS
Technology
(
MIPS |
Quote |
Chart |
News |
PowerRating), on the
10 Technology List, is in the second day of a
consolidation. MMC Networks
(
MMCN |
Quote |
Chart |
News |
PowerRating), on the same list,
is also consolidating after a fast move. Just wait for
follow-through to the upside here, as it closed poorly on
Thursday.
And finally, many
of the biotechs are consolidating after fast moves higher
off extended low-level bases. Going forward, these stocks
may be worth watching, to see if they can rally out of their
first pullbacks.
Best of luck with
your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
P.P.S. Feel free
to e-mail me regarding the Haggerty seminar. I’ll be happy
to answer all your questions.