Wait For These Two Things Before Buying
On Thursday, the Nasdaq opened slightly weaker and after
initially trading back-and-forth, it begin to sell off. It then traded sideways
to higher throughout mid-day before selling off again going into the close.
This action has it closing poorly and puts it back below
its 200-day
moving average (the blue line below).
The S&P put in a similar performance.
So what do we do? Well, we now know that
yesterday was a fake-out. Therefore, wait to see if the market can stabilize before looking to get long (or at the least, wait for entries). On the short
side, aggressive traders might want to watch the financial stocks which have
recently stalled short of their old highs. Also, if you took trades in the
homebuilders (mentioned Wednesday), make sure you look to take partial profits
and trail a stop lower should they continue lower on Friday.
As far as setups, America Movi
(
AMX |
Quote |
Chart |
News |
PowerRating), in the strong
wireless sector, still looks like it has the potential to resume its strong
uptrend out of a Trend Knockout (TKO). However, make sure you wait for an entry
(above the knockout bar’s high) since telecom (and the market itself for that
matter!) was down on Thursday.
Best of luck with your trading on Friday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. Learn my newest and most advanced version of my Bow
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