Momentum Trader Report: 04/02/08

Markets Pull Back

Oil spiked higher and Bernanke said that he is expecting a recession. Yet, the market only pulled back slightly and on lower volume. It appears that the market has priced in a recession, and is hopeful that it won’t last long. With earnings coming up, we should get more insight into how bad things might get.

There were some breakouts in the watchlist, and some continuation from pervious stock picks. That is, if they weren’t sold too soon.

ANW broke out with good volume and held on to finish higher.

LNN broke out and made a nice move, but gave much of it back.

It was mentioned in the watchlist that PTEC would be a buy over 16, but a “Short if trading below 50 MA”. It broke below the 50-day MA and closed there. It looks like it’s going lower from here.

RRC broke out barley toward the end of the day

STLD gapped up above the buy point and then rallied lower for the rest of the day. Because of the gap up, this should have been an avoid. However, I had a buy stop on this, so I got filled.

CLF broke out yesterday, but pulled back slightly, but those who held on were rewarded today.

For most of March, I was taking small profits, and mostly day trading the stocks I have been posting here. Sure, it feels good taking small profits, and then see the stock pull back, knowing that you sold near the high of the day. But some stocks that I have posted here are making good runs. Take for example WLT, which has been picked on here twice. The first time on 2/11 and again on 3/13:

Or a recent pick, CSX, first posted here on 3/23:

There are others. In typical bear market fashion, most of the breakouts posted here have since broken down after they offered opportunities for profit. But how can a trader stay in these winners? It’s not easy in this type of market. Taking most of the profits early, and holding small positions in winners while trailing stops, and adding to them as the move up is probably the best way to do this.

As mentioned yesterday, the best thing the market could do right now is rest. It did just that today, and would be great if it could rest a little more and make another thrust higher. But this is not a bull market, so don’t chase performance and be sure to defend profits.

Trade Ideas for 04/03/08: