Why You Should Exercise Caution For The Remainder Of The Week
Looking to the indices, on Tuesday, the Nasdaq chopped back
and forth in narrow range trading.
The S&P chopped back and forth in early trading,
attempted a rally late in the day, but gave up most of that rally going into the
close.
So what do we do? I really hate to make too
much out of thin, pre-holiday trading. About the only thing I can glean is the
fact that some sectors are stalling just short of their old highs. However,
until we get the holiday (and Friday) behind us, I really don’t think too much
should be made out the remainder of this week’s trading. As far as trades, you
might want to take it easy as it will likely be thin and choppy for the
remainder of the week.
On the long side, most sectors are becoming
overbought. Therefore, focus on areas that have recently pulled back and
that can trade contra to the indices (e.g., gold).
On the short side,
continue watching of opportunities in areas that look vulnerable such as
broker/dealer and Internet.
Looking to potential setups, Goldcorp
(
GG |
Quote |
Chart |
News |
PowerRating), mentioned
Monday night, still looks like
it has the potential to resume its uptrend out of a Trend Knockout (TKO).
Sina
(
SINA |
Quote |
Chart |
News |
PowerRating), mentioned recently and in the weak
Internet-software & services sub-sector, still looks poised to continue its
downtrend out of a pullback/inverted cup and handle-like pattern.
Best of luck with your trading on Wednesday!
Dave Landry
P.S. Reminder: Protective stops on
every trade!
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