Swing Trading: Locking in Gains After the Market’s Big Move
If you are buyer of weakness and a seller of strength, then Tuesday was likely a cash register-ringing day for your swing trading portfolio.
With the Dow closing higher by more than 200 points, many of the stocks that had pulled back have since rallied into strength, rallying to new short term highs or simply closing back above their 5-day moving averages.
There can be a temptation to ignore exit rules when markets are soaring higher and everyone in the financial media is in full cheerleading mode. But if your trading discpline is telling you that now is the time to lock in gains and prepare for the next trade then, to put it bluntly, now is the time to lock in gains and prepare for the next trade.
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Among the stocks making big gains on Tuesday were ^KO^, which we highlighted in yesterday’s 7 Stocks You Need to Know. Shares of KO gained well over 3% after pulling back for three days in a row and closing in oversold territory above the 200-day moving average.
Scheduled to report earnings on Wednesday are ^INTC^, ^EBAY^ and ^AXP^, among others.
Here are 7 Stocks You Need to Know for Wednesday
Reporting quarterly earnings after the bell on Tuesday were both ^AAPL^ and ^YHOO^.
Shares of Apple closed higher for a third day in a row ahead of trading on Wednesday, while YHOO climbed from oversold territory below the 200-day.
Strong earnings from technology companies like ^IBM^ helped boost the sector heading into midweek. Other tech stocks making big gains ahead of trading on Wednesday are ^AMD^ and ^BRCM^, both up more than 4% and 6%, respectively.
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What’s down on an up day? Selling in the health care sector took stocks like ^WLP^ down ahead of trading on Wednesday. Shares of WLP have closed lower for three days in a row and are now oversold above the 200-day moving average.
Shares of ^HOG^ soared by nearly 9% on Tuesday, leading the S&P 500 as it broke out to its highest levels of the year. HOG had finished at its 10-day closing low on Monday.
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David Penn is Editor in Chief of TradingMarkets.com