Momentum Trader Report: 02/16/09

16 Feb

Posted by Momentum-Trader as Momentum-Trader Report

The major indexes continue to trade within triangle patterns. Triangle patterns are often continuation patterns, which means the most likely break will be lower.

Here’s the S&P 500. It traded below its lower trendline, and now sits right on it.

The NASDAQ has been leading this market, and has bounced of its lower trendline. Does it mean that we could see a little more upside here?

I didn’t have any new trade ideas for Thursday (hence no post last Thursday), but some stocks on the Watchlist set up nicely on Thursday, and two of them broke out for profitable day trades on Friday. Let’s take a look at those.

I like how gold stocks are setting up. Many of them made big moves last Wednesday, but haven’t moved much since then as they consolidate that move. For example, KGC triggered, but hasn’t moved much since. I still like it though and am willing to take a little more risk with it in this market.

There is another gold stock in the Watchlist for Tuesday, ABX.

As noted above, the market should move big in one direction, and it could happen this week. I have found a lot of charts that look good on the long side, but will still consider taking profits between 1-4%, unless the action tells me otherwise.