Don’t Be a Degenerate

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With every sloppy chart in sight breaking out, it is understandable to see traders shunning all forms of discipline. After all, if only price pays, then what good are a bunch of stupid trading rules by which to abide? So, the chase is on, and it is without shame. Indeed, there is nothing wrong with playing along in a market that is hell-bent on perpetually dripping higher. The key is to do so within the context of setups that are “clean.” As an example, let’s take a look at a stock that I am currently long: NCT.

This is the type of chart that I am comfortable holding in a market filled with setups that I would usually consider to be less than attractive, in terms of the risk/reward profile. Here, however, we see a tight base that broke to the upside on volume, and is now flagging high and tight. I am keeping a tight leash on all positions here, and will let 12631 members know in real-time when I sell, but consider this chart of an example of the kind of setups that I believe are only worth playing when the broad market is stretched, but even more stretched by the day.

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