Tech Wreck
On Thursday, the Nasdaq gapped lower and sold off. Then
after some mid-day drifting, it resumed its sell off. This action has it closing
poorly, below its 200-day moving average, and back into the area of its recent
breakout.
Thursday’s action is disappointing to say the least.
The S&P held up very well on a relative basis.
It kept its losses to the high single digits.
So what do we do? I suppose the
only saving grace for this market is the fact that the S&P didn’t get
creamed like the rest of tech. But, that’s not enough for you to hang hat on.
Look to play both sides,
but
tread lightly. Also, you might want to avoid tech on the long side until the
dust clears.
Looking to potential setups,
Beazer Homes (BZH),
mentioned Wednesday night, still looks like it has the potential to rally out of
a high level "mini" base. Just wait for follow through to the upside
as it was down on Thursday.
Merck (MRK),
in the weak drug sector (and let’s face it, when you need drugs, you don’t want
weak ones), looks poised to continue its meltdown out of a pullback from lows.
Best of luck with your trading
on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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