Still Set Up For Shorts

December 28, 2000
Dave Landry

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
market’s opening. Therefore, overnight events may alter the
outcome of these observations.

On
Thursday, the Nasdaq lapped slightly lower (a) but quickly reversed. It then
found high, chopped around, sold off, and finally, late in the day, rallied to
close well (b). In less exciting words, a choppy narrow range day like those normally
associated with pre-holiday trading.

We’re still in pullback from lows mode with the major trend
remaining down.

src=”https://tradingmarkets.com/media/images/Landry2/otc122800.gif” width=”470″ height=”320″>

So what do we do? The broader market remains overbought and
the trend remains down. This suggests that the market remains vulnerable.
Therefore, tread lightly on the long side and consider a few shorts.Â Also,
Friday, especially late in the day, could get thin as traders start their
holiday early. Therefore, make sure you have ample liquidity before placing
trades.

Looking to potential setups, Regeneron Pharmaceuticals
(
REGN |
Quote |
Chart |
News |
PowerRating),
on the Pullbacks
Off Lows List,Â looks like it has the potential to resume its strong
uptrend.

On the short side, Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating), mentioned
Wednesday night, was up on Thursday but still looks poised to resume its
downtrend out of a pullback from lows/inverted cup-and-handle.