Not a very exciting day in the markets as the stocks made the lows for the day in the very first minute and then it was a pretty drab affair after that. I still expect that a bounce will occur sooner rather than later, but looking at the charts, I feel this bounce will a good shorting opportunity rather than an opportunity to go long. Let me show u readers what I am seeing.
Let's have a look at the S&P chart first.
We ended today just below the level I had marked last week. When I had marked this level last week, it was support but now obviously, this support has become resistance. And if we do manage to cross the 1083 level, straight ahead lies the MA(50). Now if that wasn't enough, MA(200) will soon start declining to provide further resistance in this congested area.
The story at NASDAQ, if anything, is even worse.
Add to that the fact that the volume today was lower than the recent down days. Doesn't make a pretty picture does it? All this would make very cautious about the likely bounce. It's not wrong to go long if you want to play this bounce, but I would recommend being in taking profits off the table.
Pretty much all the stock's from last night's watchlist performed well today, with NSU in particular, being up 5%. Since all these long and short setups are still in play, I wont be coming up with a separate watchlist tonight. Here is the link to that watchlist in case you missed it.
Take care and good luck!
4 comments:
Are you still short AMAT? AMAT reports on weds, i don't know if i am bearish enough to take on that much risk. Its going to be the guidance that determines the break b/c i am fairly certain they beat estimates for last quarter, whats your thoughts? Thanks.
Was never in it. My trading is pretty less right now as I adjust to the new environment. But you answered your question yourself Bill. Work towards minimizing the risk rather than maximizing the profit. And in my opinion, no stock is worth holding through earnings unless its a very small position and you can take a big loss on it. Hope this helps!
Just wondering what your rationale is for expecting a bounce "sooner rather than later." Is it technical, emotional, or? Thanks for your thoughts!
Technical Doctor. Its always Technical. Its basically the oversold post that I posted on the weekend.
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