Swing Trading: Four Key Risk Management Strategies for Short Term Traders
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The Dow finished higher by more than 200 points, with insurers and financial stocks among those leading the market heading into trading on Tuesday. A growing number of stocks have become overbought below the 200-day moving average (see our PowerRatings column on overbought homebuilders for just one example of buyers taking one sector deep into overbought territory), which suggests that a near-term, short-term reversal to the downside is increasingly likely.
Here are 7 Stocks You Need to Know for Tuesday
Insurers were some of the biggest gainers on the first trading day of the week, with ^HIG^ climbing by more than 12% to lead the S&P 500. Also making significant gains ahead of trading on Tuesday were ^LNC^ and ^GNW^, both up more than 8% and 7%, respectively.
What’s down on an up day? Pulling back above the 200-day moving average in Monday’s trading were shares of ^MON^. The stock has been oscillating above and below its 200-day moving average since the beginning of the month.
New to Swing Trading? Read our primer, What is Swing Trading? .
Climbing into overbought territory below the 200-day moving average are ^GOOG^, which gained more than 2% in trading on Monday, and ^GS^. Shares of Goldman Sachs added well over 3% ahead of trading on Tuesday.
Up more than 3% to finish at a new 10-day closing high on Monday were shares of ^AMZN^. AMZN has gained for four out of the past five trading days and is now overbought above the 200-day moving average.
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David Penn is Editor in Chief of TradingMarkets.com