Where To Look For Buying Opportunities
Looking to the indices, on Tuesday, the Nasdaq opened
weaker and sold off hard. However, it found its low quickly. Then after drifting
sideways, it rallied sharply late in the day. This action has it reversing after
tailing lower and suggests that its correction is complete.
The S&P put in a similar performance. This action
has it closing well after tailing below its 50-day moving average
Looking to the sectors, many, like the market itself,
reversed after tailing lower. This action sets up pullback from highs in
recently mentioned strong sectors such as cyclicals and retail. It also sets up
a TKO in the semis.
So what do we do? The fact that the market
reversed after tailing lower is encouraging. This action sets up many pullbacks
in sectors and stocks themselves. In fact, tonight I have more buy setups
generated by my database than I’ve seen all summer. Most are in those areas
mentioned above. Therefore, consider the long side but continue to keep it light
because a) the S&P remains stuck in a trading range and b) it could be thin
and choppy as Labor Day weekend draws near. Â
Looking to potential setups, Deere & Co.
(
DE |
Quote |
Chart |
News |
PowerRating) in the
strong cyclicals, still look like it has the potential to resume its accelerating
uptrend out of a Pullback/Trend Knockout (as usual, if you need the rules, shoot me an
email).
There are a plethora of stocks setting up in the
aforementioned semis. Take your pick. For example, Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating),
like many in the sector, looks poised to resume its accelerating uptrend out of
a TKO.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…..The best thing about Dave Landry on Swing Trading is that it is so easy to read and understand. Examples are numerous and the theme of money management – with concrete examples – is repeated throughout the entire book….”
Active Trader Magazine
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