Still Room To Short?
On Monday, the Nasdaq opened lower and sold off for a solid
trend day lower. This action puts it right at last week’s lows.
The S&P was also creamed for a solid trend day lower.
This action suggests that last week’s lows (at least) will be challenged.
So what do we do? We’re oversold, but I still think there is
some room for some issues to head even further lower. The semis, which failed to
materially participate on Monday, may be good candidates for shorts. However,
keep in mind that the potential exists for a “pop down” opening.
Therefore, you might want to wait for the first bounce before establishing any
new shorts.
Looking to potential setups, Techne Corp.
(
TECH |
Quote |
Chart |
News |
PowerRating), in
the weak biotechs, looks poised to continue its rollover out of an inverted cup
and handle.
Microsemi
(
MSCC |
Quote |
Chart |
News |
PowerRating), in the potentially vulnerable
semiconductors, appears to be resuming its downtrend out of a pullback from
lows.
ABGX Follow Up
As you know, I have been using Abgenix
(
ABGX |
Quote |
Chart |
News |
PowerRating),
originally mentioned as a Bow Tie a few weeks ago, as an example. Last week, I
was showing how a two-bar trailing stop could be used on a re-entry (a). This
stop was hit last week. Another alternative for those willing to trade longer
term is to trail at prior bases (b). For more on position management, see my
article on how
to use discretion with your swing trades and my articles on money
management.
Best of luck with
your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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