Friday, April 15, 2011

Some thoughts and stocks

Sorry dear readers but I just haven't got time to blog much this week. Life has just been very busy the last couple of days, and add to that some computer problems, and the result is, well, not good. In the last post, I commented that the market was quickly approaching oversold levels. The markets did rally well from the intraday lows but overall signs are not too encouraging for the bulls. The markets did close below the MA(50) on SPX. Generally, if you are bullish, you don't want to see too much consolidation around the major moving averages. These support points should act as a springboard for strong price moves, not consolidation. Too much consolidation or sideways action here is just going to give the bears a chance to catch some breadth, regroup and then attack again. That said, this is not really a great point to initiate new shorts. What I do expect to see, is a short term bounce and chances are that this bounce will most likely get sold off. Selling into strength has been the story for the last couple of weeks.

One can still profit very well in these markets but one has to be very disciplined when it comes to managing risk. Be quick in taking profits and keep an eye on overall indices as well as your individual stocks. I am still ending each day with sizable cash position, so am quite comfortable with whichever direction the market decides to take. Of course, it is earnings season, so some huge surprises in either direction in leading stocks, and all the above analysis gets thrown out of the window. Fun, isn't it?!

During the last couple of days I have pointed out HUN, COO, BLTI and JBHT on twitter. All of these stocks have done well and most of them have broken out since. Hopefully, you readers were able to benefit from these calls. They all look good for some more upside, so I would recommend keeping them on your watchlist.

Take care and good luck!


Beckymania said...

Great summary sir! Agree every bit of it.

positiontrader said...

Thanks! Glad you liked it!

ppmoore said...

Yes, I agree.
Necessary to keep an overall perspective, and not to carry too many positions, especially over the weekend.