Take What The Market Gives
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Techs led the big up move yesterday, but this time they were joined by many of the other institutional favorites. The advancing volume was the second largest in a month.
I saw a lot of call buying (vs. put buying) on the CBOE–a bit too much enthusiasm so quickly after the three-day drop of 4.7% in the S&P 500 cash. Last week I read about a good amount of money coming into the large-cap funds. It is the end of the quarter, so recognize this for what it is and ride it.
The early big upside action in the futures meant gap openings in all the institutional stars, preventing trade-through entry in most of our patterns. However, there were a few tradable narrow-range consolidations at intraday highs, such as those in Schwab (SCH) and EMC (EMC).
Don’t play the predicting game on how far this rally can go. Take what the market gives you, when it gives it to you. This is very much a fragile market.
Target Stocks Of The DayÂ Â The institutions came back for some of the favorite consumer stocks yesterday, and the following names look good on any continuation moves: Wal Mart [WMT>WMT], TJX [TJX>TJX], Staples [SPLS>SPLS], Lowe’s [LOW>LOW], and Dayton Hudson [DH>DH].
After pullbacks to their 50-day exponential moving averages, Ascend Communications [ASND>ASND] and Applied Materials [AMAT>AMAT] look like good continuation patterns as well.
Finally, a couple of stocks showing interesting patterns right near their highs are Amgen [AMGN>AMGN] and Nextel Communications [NXTL>NXTL].
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