That’s My Story And I’m Sticking To It
On Wednesday, the Nasdaq started firmer but soon began to
sell-off. By mid-day, it found its low and began to rally. This action forms an
intraday cup and has the index closing well.
The fact that the Nasdaq bounced off the level of its last
breakout is a positive.
The S&P finally began to show some constructive action.
It bounced off of a support level and rallied to close well. Looking ahead, it’s
important for it to stay above this level.
So what do we do? I’m going to
stick with the upside argument. Why? Because the indices found support (and
reversed) at key levels, because the market is now oversold (based on average
advance/decline readings and price) and because many sectors (including
technology in general) are set up as pullbacks. Further, once again as I look to
the database, I see many potential long candidates and few meaningful shorts. As
I said on Tuesday night, these stocks look poised to rally as soon as the market
gives them the OK. Therefore, continue to look to play the long side,
but, as always, wait for entries.
Looking to potential setups,
Cree Research (CREE),
in the strong semis, is set up as a cup-and-handle/pullback.
The Semi Holders (SMH)
themselves are also set up as a big-picture cup-and-handle.
Smoke ’em If You Got ’em
Genesis Microchip (GNSS)
has now rallied over five
points since first mentioned (a). If you are blessed with such a quick profit,
don’t be shy about locking in a piece (and trailing a stop!).
Best of luck with your trading
on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
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