by Dave Landry, Director of Research
TradingMarkets.Com
December 11, 2003
Looking to the indices, on Wednesday, the Nasdaq generally worked its way lower throughout the day but did manage to rally going into the close. This action has it approaching prior support.
The S&P put in a somewhat similar performance. This action keeps it right at the 1060 support level.
So what do we do? The indices in and of themselves don't look too bad--they are holding support. What concerns me is what's going on "under the hood". Many stocks were hit especially hard on Wednesday. Retail, for example, continued to slide. This action suggests that a top may be in place here. The financials and interest sensitive issues such as the homebuilders were decimated. Many other areas such as the semis, computer hardware, and software (i.e. tech in general) remain vulnerable. Considering the above, on the long side, you might want to stick with areas such as the energy stocks that can trade contra to the overall market. On the short side, for the aggressive, you might want to continue watching for transitional (i.e. early trend) shorts in those weaker areas mentioned above.
Looking to potential setups, Noble Energy (NBL) in the strong energy-independent oil & gas sub-sector, looks like it has the potential to resume its sharp thrust higher out of a Trend Knockout.
Best of luck with your trading on Thursday! |
