Setups for Thursday 04/08

Making slight adjustments to the market is essential.  Stocks ebb and flow, and sometimes you need to tinker with your strategy on a short term basis to extract the most amount of money from your trades.  I want to emphasize the importance of using stop losses going into the rest of this week. Despite my view we are in a cyclical bull market, the fact remains that we have covered a lot of ground in a short amount of time since February.  Retesting the 20 or even the 50 day moving average can happen at any time.  While I did very well in individual names today despite the broad market selling off, I cannot afford to become a cocky loser and disregard the fact that around 70% of the short term movement in stocks is a derivative of the action in the broad market.

Tonight, we will start off by looking at two stocks where I think you should consider buying them on this dip, so long as you have a stop loss in place.

Should Massey gap down hard again tomorrow morning, I would look to jump in here. We have just seen two full days of intense selling on huge volume after the terrible mine explosion and deaths over the weekend. Many people who wanted out of the stock are already gone.  Yet, on a weekly basis the stock remains in its uptrend and has done no real technical damage.  IF, and only if, you can get this stock at $43.50 or lower, I think you have an excellent risk/reward setup. Place your stop loss just below $40, which would be a big psychological level for the stock in my opinion if it broke.

Unlike Massey, you can look to buy this one right away.  Westport broke out and is now retesting the break out on rather unimpressive volume.  This is a very good set up if you missed the initial break out. Many day-traders and late-comers are getting shaken out right now.  The idea is to buy their shares.  If the break out was true, the stock really should not go below $16.80, but I would keep a stop loss around $16.15 to make sure you don’t shake yourself out too soon.

Ok, enough trading lessons. Here are charts to watch for tomorrow.  Feel free to pick and choose whichever charts fit your individual trading style.

If you enjoy the content at iBankCoin, please follow us on Twitter