So, in a previous post I talked about how having a thesis can really cost you money in this market. We all know of the headwinds that we’re going through globally, but the market continues higher. I had stubbornly fought it looking for that flush move down and had taken down my YTD from 17% to 12%. If it weren’t for my risk management decision to use options the losses it could’ve been a total blowout. I’ve seen fellow traders on twitter quit this during this rally because there was every reason in the book for it to not continue. Anyway, if you’re like me you might be asking yourself is it too late? What can I do now?
When I walked into this week, I scanned around for the sectors that were beat up and had to play catch up. The Russell 2000 was great starting point as many small caps have not moved much with this rally mainly happening off the backs of mega-cap stocks. Lot of these mega-cap stocks are already up big % wise so it’s tough to jump right in without decent pullback or sideways consolidation.
Remember, it is still a stock pickers market you must do your RESEARCH. This could be beautiful market setup for rotation daily where we might only go up 2-5 pts on the SPX, but if you watched the charts you could find names that go up 5-6% in couple days. I’m going to be look at these following charts for names to play:
(FULL DISCLOSURE: LONG EBAY MA AFFY)
GS – Consolidating nicely
C – Nice consolidation
ULTA – Powerful bar breaking downtrend
AFFY – Biotech so becareful but over $17 and it could get interesting.
ACOM – Consolidating nicely, no heavy selling w/ volume either.
TSCO – Consolidating recent gains, could move back to $100.
VAL – Break over $53 gives you decent probability of good run after.
IBM – Inverse head & shoulders could touch $205-210 again. It must keep holding $199-200 as support/base for higher prices.
