Strong Sector And Strong Stock
We are always looking for the right stocks to
trade. In other words, we are searching stocks with good tradable patterns, such
as breakouts and pullbacks. So, often we can get excellent ideas from the strong
sectors and weak sectors of the day. As you can see on its daily chart, the
biotechnology was the strongest sector today, up 6.6%. It broke out strongly
above its resistance level and closed at a two-month high.
With the information above, I scanned stocks in the biotechnology sector, and I
found one issue looks very interesting. Arena Pharmaceuticals (ARNA)
staged an expansion breakout above its four-month trading range. Volume was
nearly three times its daily average. We may see some profit-takers tomorrow,
but it looks promising. Another point I want to stress is that the stock opened
at the low, never looked back, and closed near the high.
It sure pays to watch the strongest sector of the day.