Why You Should Take What The Market Offers
Smoke ’em If You Got ’em
Sunoco
(
SUN |
Quote |
Chart |
News |
PowerRating), a stock mentioned recently (a), has
traded over 2 points higher (total) before reversing on Monday (b). When you get
a quick profit like this, make sure you lock in a piece and move your protective
stop to breakeven on the remainder. This way, barring overnight gaps, you have
“free” trade with the potential of it turning into a homerun.
Caremark RX
(
CMX |
Quote |
Chart |
News |
PowerRating) has also moved nicely higher (b)*
since first mentioned (a). Make sure you are looking in profits and trailing
stops, especially when you consider current overall conditions.
On Monday, the Nasdaq opened slightly firmer but quickly
found its high and then sold off for a solid trend day lower.
This action has it closing poorly, puts it well below its 50-day moving average,
and keeps it below (now even more) overhead resistance.
^next^
The S&P, put in a similar performance.
This action keeps it in a trading range.
So what do we do? As mentioned above,
Monday’s action confirms that the S&P remains stuck in a range. The Nasdaq
action, as Martha has been saying lately, “is not a good thing.” It
suggests that a potential short-term top could be in place here. Many of the representative
tech sectors here also look vulnerable. Even recently stronger areas such as
telecom are bumping up against resistance at prior tops. Considering the above,
we could see shorting opportunities in tech soon if they continue to show
weakness followed by an orderly pullback. Outside of tech, you might want to
hold off on new positions in the energies (see recent archives) since they seem
to have lost a little steam today after tagging new 52-week highs (e.g. the SUN
chart above).
No setups tonight.
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
Click here for details.
*”Nice” in this market environment is relative!