Wait For Your Next Pitch

On Wednesday, the Nasdaq lapped lower, bounced
and then chopped lower for a 2 1/2% haircut.

Last week’s lows still remain a possible target
to the downside and 2100/50-day moving average remain resistance to
the upside.

 

Again, the top of its
recent range/50-day moving average will likely provide resistance to
the upside here. And, last week’s lows remain a reference point to the
downside.

 

So what do we do? Today’s trading can best be
described in three words: choppy, choppy, choppy. For me, this isn’t a
good environment to trade in. I’d much rather wait until things set up
again. Therefore, I think I’m going to stay on the sidelines for now.

Except for a possible re-entry on Abgenix (ABGX)
(see below), I was unable to find any worthwhile setups.

Lessons Of The Day

I thought it would be interesting if we looked a
the stocks mentioned on Tuesday night to see if we could learn
something from Wednesday’s trading.

Advent Software (ADVS)
gave us the obviously lesson of “no tickee, no tradee” as it
never came anywhere close to triggering (Of course, I’ll have to deal
with an idiot or two who’ll beat me up on that pick, but hey, I don’t
count the ones that don’t trigger. And, you shouldn’t trade them
either). 

Cima Labs (CIMA)
gapped down sharply on the open and immediately reversed. On sharp
gaps, you’re often better off taking a “wait and see”
approach. See my article, Opening
Gaps, Fade ’em, Trade ’em or Ignore ’em for some general
guidelines here.  

Abgenix (ABGX)
is covered below.

Walk Through

Lately,  we’ve
been talking about about where you could have entered, placed
protective stops, taken partial profits and trailed stops on Abgenix (ABGX),
a short mentioned last Friday. If you haven’t already done so, you
might want to read the recent archives before proceeding.

On Wednesday, ABGX
rallied to knock us out of our remaining shares. It did reverse to
close poorly and looks poised to make another leg down. However, you
had no way of knowing this at the time the stop was hit. ALWAYS, honor
your stops.

For more information on money management and
position management see this column’s archives (on the side of this
page) and read my articles under Traders
Lessons.

Best of luck with
your trading on Thursday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on
every trade!

“…I
bought your book and love it. My wife can’t understand why I read it
in bed…..

Neal G.

Oregon

No risk,
30-day, money back guarantee.