Where To Look For Shorting Opportunities
On Tuesday, the Nasdaq gapped higher and continued higher
in early trading. Then, after trading sideways for much of the day, it began to
sell off in late afternoon trading. However, it resumed its rally going into the
close. This action has it closing well and approaching its 50-day moving average
(a).
The S&P also put in a solid performance. The bottom of
its recent topping formation, 870 level (a), which is near its 50-day
moving average (b), could provide resistance.
So what do we do? The fact that the market was able to
muster two up days in a row has the media celebrating. Me? I’m not so
excited. So far, it only looks like a pullback from lows. This is especially
true when you consider some of the weaker sectors such as insurance,
broker/dealer and telecom (charted below). Therefore, as mentioned recently,
continue to put together a list of potential candidates (shorts) in these and
other weak sectors. For the aggressive (e.g., daytraders), look to short the
indices should they gap higher and show early signs of reversing.
Insurance
Telecom
Broker/Dealer
Looking to potential setups, Dupont
(
DD |
Quote |
Chart |
News |
PowerRating), mentioned in
Friday’s commentary and in the weak chemicals (a), still looks like it has the potential to resume its downtrend out of a
pullback.
Housekeeping
Lately, I have had a few emails returned due to fact that
attachments are not allowed by the receiving email account. Therefore, if you
requested and did not receive the rules to the OSS system (triggered and
mentioned last Thursday), please email me again (from an account that allows
attachments).Â
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
“…. Feel free to quote me, the book is fantastic. It is written for traders who want to know the real basis of
successful trading. No glory stuff. No hero tales. Plain old sound advice which is a rare commodity in this business….”
Mike Marlow
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