Three Areas Where I’m Finding Opportunities

May 5, 2004
Dave Landry

I’m Dave
Landry and I approved this column!

On Wednesday, the Nasdaq traded back and forth. It did sell
off going into the close but managed to stay in the plus column.

It appears to be setting up as an inverted cup and handle
at the 200-day moving average.

The S&P put in a similar performance. This action has
it stalling after approaching its 50-day moving average.

So what do we do?
Nothing much has changed. The fact that the indices
can’t mount a decent bounce from oversold suggests that they remain vulnerable.
This continued strength (if you want to call it that) is setting up many stocks
and sectors. Financials, semis, and metals & mining to name a few, look poised
to continue lower out of pullbacks.

Considering the above,
continue to look for shorting opportunities in areas such as these. Once again,
aggressive traders might want to consider sectors that remain at high levels but
are in the early phases of attempting to make a transition lower (i.e.,
potential tops). There is one caveat though, based on Wednesday’s action, the
market could be in a holding pattern until Friday’s employment report is
announced. Therefore, you might want to keep it light until then.

As far as setups,
Cymer
(
CYMI |
Quote |
Chart |
News |
PowerRating), in the weak
semi-equipment sub-sector (see below), looks poised to resume its persistent
downtrend out of a pullback.