Keep an Open Mind

On my StockTwitsTV show Sunday night, I mentioned there were no trading setups. While going over my screens Tuesday night, I noticed some stocks building decent bases. A few thoughts:

1) It is important to keep an open mind and stay on top of the market on a regular basis. If you trade stocks or manage money for a living, you should be looking at stocks on a NIGHTLY basis. Why? Because the market is so dynamic and can change quickly.

2) I am not saying we are out of the woods yet. I’m simply pointing out that stocks are STARTING to look better.

3) If the stocks on my watch list can breakout on strong volume and hold, I would feel more confident committing capital.

4) If the major averages can get above their 50-day moving averages and hold, I would also feel more comfortable. We are close now, but keep in mind this has been an area of resistance for the market lately.

5) Some stocks on my watch list include: $NFLX $APKT $PAY $FNSR $SLXP $CRR $CTSH

6) A few stocks have held their breakouts so far, a positive sign. Examples: $ROVI $PWER $CLB

7) I like how the market ignored the Moody’s downgrade of some European countries on Monday, and also shook off weak earnings from $IBM and $TXN to close higher on Tuesday.

8) The past 12 trading days have come on below average volume, showing that institutions are not participating. I would REALLY like to see volume pick up in order to feel more confident about a sustained uptrend.

Conclusion: I remain cautious, but I am not opposed to taking some light positions to see if this market can prove itself. There’s no need to rush back into stocks. If your small “test” positions show you a profit then, in theory, plenty more stocks will setup and you can further increase your investment levels. If the market continues its recent downtrend, then at least you can get out with a minimal loss. As always, keep an open mind and maintain a watch list of strong fundamental companies building sound technical bases.

Please remember that the purpose of this blog is to help people with idea generation. If you trade some of these stocks, PLEASE, PLEASE, PLEASE use stops. In other words, if some of these stocks turn against you and the market doesn’t cooperate…protect your portfolio! Thank you. Good luck trading!

Follow me on Twitter @jfahmy

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: , , , , , , , , , , ,

You might be interested in:
blog comments powered by Disqus