This Week’s Trading Focus
Kevin Haggerty is a full-time
professional trader who was head of trading for Fidelity Capital Markets for
seven years. Would you like Kevin to alert you of opportunities in stocks, the
SPYs, QQQQs (and more) for the next day’s trading?
Click here for a free one-week trial to Kevin Haggerty’s Professional
Trading Service or call 888-484-8220 ext. 1.
The SPX and $INDU finished the first 3 trading
days of 2007 at -0.7% and -0.6%, but there was a positive divergence in
technology, drugs, biotechs, and select health care stocks. The QQQQ was
+1.6% on the week, $COMPX +0.8%, while the IBB was +1.4%, PPH +1.0%, and the SMH
+0.7%. The semiconductors have most of the major companies reporting Q4
earnings this month, and January has been a positive month for the group most
the of the time, but the price action on Friday was negative with the SMH -1%
versus +1.9% the previous day. The SMH volume was above its 30-day average
all 3 days last week, so the institutional activity has increased, and that
means the semis remain a focus this week for daytraders, but not because of good
daily chart position.
NYSE volume was 1.71 billion shares on Friday,
with the internals weak as the volume ratio was only 24 and breadth -1642.
The 4 MA of the volume ratio is now 36 and breadth -634. The SPX closed at
1409.71 following the 1405.75 intraday low, which put the 1-2-3 lower top in
play below 1410.28, and the short-term trend is down until that channel
reverses. The 50 dema is 1397.82, with the next key angle price zone
symmetry at 1394-1390. Both the OIH and XLE are in key retracement zones
on the daily chart, in addition to their longer-term 377 and 233 demas.
The OIH and XLE declines on Friday to intraday lows of 128.95 and 55.19 set up
excellent RST long trades for daytraders in confluence with the daily chart
symmetry. The trades had a very positive result and were easy to manage.
Both the OIH and XLE are very short-term oversold, with the 5-RSI below 20, so
that was also a significant reason that the energy sector was a key focus last
week, and remains the same this week, along with technology, biotechs, drugs and
select health care stocks.
Have a good trading day,
Kevin Haggerty
Check out Kevin’s
strategies and more in the
1st Hour Reversals Module,
Sequence Trading Module,
Trading With The Generals 2004 and the
1-2-3 Trading Module.
