This Simple Technique Could Keep You Out Of Trouble On Thursday
Stay On The Trail
Ryland Group
(
RYL |
Quote |
Chart |
News |
PowerRating), mentioned recently, somehow managed
to continue to rally on Wednesday. When a stock moves in your favor like this, make sure you
continue to trail
your protective stop higher.
Wait For Entries
Sandisk
(
SNDK |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night, sold off hard
on Wednesday. Fortunately, it did not trigger an entry–trade above the prior
day’s high(a). Wait for entries, especially in weak markets.
Looking to the indices, on Wednesday, the Nasdaq lapped
lower and began to sell off hard. Then after a brief pullback, it resumed its
sell off. It stabilized and drifted throughout mid-morning but the selling
resumed in early afternoon trading. It did manage to bounce late in the day but
the selling resumed going into the close. This action has it closing
poorly.
The S&P also sold off hard to close poorly.
So what do we do? Although Wednesday’s sharp
sell off puts some sectors in question, most still remain in uptrends. However,
its important for these sectors to stabilize at these levels. Otherwise, they
too could be in trouble. Therefore, on the long side, stick with the
strongest sectors but wait for entries just in case this is the start of
something bigger.
Looking to potential setups, often, after big down day, you
will see some early follow through to the downside but then a reversal.
Therefore, for the brave, there may be a day trade opportunity in the
index shares should they gap lower on the open and then show early signs of
turning around.
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
P.P.S. Learn my best swing
trading strategy in my new interactive CD-ROM. Click
here now for details.