Why Wouldn’t I Buy This Stock Right Now?
In
my
previous column we discussed
the fact that QQQ was running up into some key weekly price resistance zones
and printing a Bearish Pattern on a daily time frame. Well, in the past two
days, the market has completed ignored those items and continued to run up.
As a daily swing trader this is great in part, and not so great. Why?
1. Long trades I put on
in the last pullback are running, and I’ve taken partial profits and trailing
stops on the rest. However, I’m not adding any new positions on the long
side as this market continues to crank up.
2. The other side of it is that I am seeing lots of short swing setups, and
so far they have either not triggered or have triggered and those shorts are
either not doing much or I’m taking some heat on ‘em. That’s
the way it works though….unless you’re all long all the time.
I promised to provide an
example of a stock that I would not buy right now based on the QQQ situation.
One good example is Symantec
(
SYMC |
Quote |
Chart |
News |
PowerRating).
This stock has hit a Fib price resistance zone from 36-38.10, and has also printed
a Bearish Butterfly pattern similar to the QQQ daily chart. This would be an
example of a reversal short opportunity or a “buyer beware†stock.
src=”https://tradingmarkets.com/media/2004/Hobbs/dh010804-01.gif” />
Now, what would
I buy? I’m getting very interested in Homebuilders at these levels. DR
Horton
(
DHI |
Quote |
Chart |
News |
PowerRating) has completed a symmetrical two-step pattern
into a Fib price support zone and left a large tail/shadow candlestick today.
Definitely a long candidate –as long as it does not violate my price support
zone of 34 to 38.
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Alright folks, have a great
night!