This stock still looks poised to move
More Lessons
This market continues to provide us with a
plethora of lessons.
Along the lines of damage control (see Tuesday’s column for more details),
let’s follow up on the Biotech HOLDRS
(
BBH |
Quote |
Chart |
News |
PowerRating). Notice the stock gapped
to its exact high on Tuesday and then promptly reversed. In fact, it’s
now actually trading at a new closing low–lower than it was before the
news event. As you can see, by implementing a damage control strategy, you
occasionally will be able to stick with a winning trade.
Smoke ’em If You Got ’em
As I preach over and over, take partial profits when your profit target is
hit and then tighten your stop to breakeven. This way, barring overnight gaps,
the worst you can do is breakeven and you position yourself for a potential
homerun. Notice our old friend Companhia Vale Do Rio Doce
(
RIO |
Quote |
Chart |
News |
PowerRating) triggered
out of a Gatekeeper (as usual, email me if you need the rules) and then moved
nicely lower (on Wednesday). When blessed with a quick profit like this, make
sure you lock in a piece and then tighten your stop to breakeven.
As far as setups, Petroleo Brasilerio
(
PBR |
Quote |
Chart |
News |
PowerRating),
mentioned recently, still looks poised to continue lower out of a First Thrust.
I covered the above in much more detail, along with many other examples, and
current market conditions earlier today in my weekly interactive audio/visual presentation.
Email me if you
need (free) recorded link to this and/or sessions for the prior year (covering subjects such as
money management, position management, entries, damage control, scanning
etc..).
Best of luck with your trading on Thursday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free
trial to my trading service, click
here.