Two Areas That Look Like They Have The Potential To Continue To Outperform The Market
Getting Knocked Off The Trail
Lately, we have been discussing money management techniques
on Kmart
(
KMRT |
Quote |
Chart |
News |
PowerRating), a stock mentioned recently(a). To recap, we talked
about taking partial profits and trailing a stop higher (b). When we last left
off, the stop was raised to 4-points below the closing price. On
Tuesday, Kmart took out (traded below) this level(c).Â
As mentioned recently: If you’re new to momentum based swing trading and would
like more information (e.g. on the basics such as money management), email me and I’ll be happy to send the primer section
from my second book.
On Tuesday, the Nasdaq rallied early but then chopped
sideways for the remainder of the day. It did manage to close well though. This
action keeps it near the top of its recent trading range.
The S&P put in a somewhat similar performance. So far,
it too remains in a trading range.Â
So what do we do? I’m encouraged by the fact
that the indices held up fairly well in anticipation of the Fed’s
decision. However, this in and of itself isn’t reason enough for me to
jump in. I’m willing to wait for a decisive breakout and then look to get
long on the first pullback. Therefore, for now, I think issues that can trade
independently of the indices are still your best bet. Two groups that
continue to turn up in my scans here are energy stocks and selected metals and
mining (e.g. copper, steel & iron). Regardless of what you do, use caution
since the market could be choppy before the Fed’s announcement and will likely
“head fake” afterwards.
As far as setups, Valero Energy
(
VLO |
Quote |
Chart |
News |
PowerRating), in the
strong oil & gas refining & marketing sector, looks like it has the potential to
resume its accelerating uptrend out of a pullback.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
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more, or to order..Â
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