Why I Remain Bullish But Think You Should Use Caution
On Friday, the Nasdaq opened slightly firmer but quickly
found its high and began to sell off hard. The selling subsided by mid-morning.
It then chopped back and forth for the reminder of the day. This action has it
closing poorly and stalling out shy of its recent high.
The S&P put in a similar performance.
So what do we do? The fact that the indices are
stalling short of their recent highs is somewhat concerning. So far though, the
market hasn’t really done anything “wrong”. The big blue arrow still
points up for it and most sectors. Therefore, continue to focus on the long
side. However, you might want to wait for entries and you might also consider a
few commodity related stocks (e.g. energy, see below) that can trade contra to
the indices–just in case this is the start of something bigger. And, as always,
honor your stops on existing longs.
Looking to potential setups, Talisman Energy
(
TLM |
Quote |
Chart |
News |
PowerRating), in
the strong independent oil & gas sub-sector (a), looks like it has the
potential to rally out of a Double Top Knockout-like formation. Â
Ecana Corp.
(
ECA |
Quote |
Chart |
News |
PowerRating), mentioned recently (a) and also in
the strong independent oil & gas sub-sector, appears to be in the
process of setting up as another pullback.
Â
Best of luck with your trading on Monday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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Richard L.
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