Friday was a lower volume consolidation day for the market, which is a healthy sign after last weeks rally attempt. As expected, the NASDAQ did poorly on Friday, due to poor earnings by Google and Microsoft.
FLIR was posted as a trade idea for last Friday, and it did trade above thre entry point. If gapped up, which are avoids, then sold off sharply. However, it rallied in the afternoon and closed above the entry price.
Trading breakouts in this market has proven to be very difficult. Many stocks that break out are giving back those gains soon after. Take a look at a recent pick, AUXL, which broke out and offered a nice gain the following day. On Friday, it retreated well below the entry point.
Don’t let a trade like this turn into a loser. That means taking profits early, or moving stops to breakeven. Until we see a follow-through day in the market, I’m not holding more than a day or two. Perhaps things will change this week with a follow-though. Follow-through days are best when they occur within 4 to 7 days of the rally attempt. Day 1 of the rally attempt was last Wednesday.
I mentioned last week that I am watching GLD, and looking to get in at a pullback. It has pulled back since then, but I don’t like this action here. I would like to see it build a base first.
Another ETF I am keeping my eye on for a longer-term trade is FXI. With the Olympics starting soon in Beijing, there will be new interest in China. I am curious to see how FXI will respond. It has been acting strong recently. Perhaps we could see some momentum here soon.
Good luck and good trading!.
RSS feed for comments on this post · TrackBack URI
Leave a reply