These Two Sectors Could Go Higher Even If The Market Corrects
Looking to the indices, on Wednesday, the Nasdaq sold off
in early trading but quickly found its low and generally worked its way higher throughout the rest
of the day. This puts it at its highest levels since January ’02.Â
The S&P put in a somewhat similar performance but
wasn’t able to keep pace with the Nasdaq. Nevertheless, this action was enough to keep it at
1-year plus
highs.
So what do we do? Overbought became even more
overbought on Wednesday. Although there was some corrective action in selected areas,
it wasn’t enough to call it a “rolling correction.” Therefore,
since the market
remains so overbought, focus on areas that have recently pulled back or those
that can trade contra to the indices. Fortunately, there are two sectors that
fit both of these profiles: metals/mining and energy. Therefore, look for
opportunities in those areas and continue to wait for a pullback before considering any
general buying.
Looking to potential setups, Occidental Petroleum
(
OXY |
Quote |
Chart |
News |
PowerRating),
mentioned recently (a), is once again set up (as a TKO).
Should it trade above Wednesday’s high, this action would suggests that its
persistent uptrend remains intact.
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my 10 best swing trading patterns and strategies in my new book.
width=”110″ height=”135″>
No risk,
30-day, money back guarantee.