Telling Tuesday?
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Stocks/Sectors and Market Bias pages. They
are provided for educational purposes only and are not
intended to be direct trading advice. Also, keep in mind
that these remarks are made up to 12 hours in advance of the
market’s opening. Therefore, overnight events may alter the
outcome of these observations.
On
Monday, the Nasdaq opened flat (a) and after tailing lower (b) managed to
rebound to near its open.
The
good news is that Monday’s probe lower seemed to find support near the
congestion area formed around the June lows (c). Therefore, we’ll score the
intra-day turnaround as a positive.Â
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The
prior lows (d) will likely remain a focus point. If we can get a heavy volume
shakeout below this level then it’s possible that the rebuilding process can
begin. Tuesday may be telling as many players return from their holiday.
So what do we do? We’re still oversold and due
for a bounce. However, once again, this isn’t reason in and of itself to go
long. Therefore, remain cautious and continue to tread lightly.
Looking
to potential setups, Polycom
(
PLCM |
Quote |
Chart |
News |
PowerRating), mentioned Friday night on the Pullbacks
Off Highs List, sold off earlier on Monday but reversed to close well. This
action forms a bullish outside day in a pullback (a).
Continuing on the pullback theme, Reliant
Energy
(
REI |
Quote |
Chart |
News |
PowerRating) looks poised to
resume its strong uptrend.Â
And
Thermo Electron
(
TMO |
Quote |
Chart |
News |
PowerRating) sold off to the bottom of its recent breakout
levels but reversed to close well. This suggests its uptrend remains intact.
For you breakout players, SunGard Data Systems
(
SDS |
Quote |
Chart |
News |
PowerRating), on the Momentum
10 Technology List,Â
is forming a narrow consolidation at high levels and looks poised to break
higher.
Due to the oversold nature of the
market, I was unable to find any shorts that I liked. If the market
can bounce for a few days, we should have numerous setups.
Best
of luck with your trading on Tuesday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
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