Tuesday, April 8, 2008

Some Nice Longs With a Few More Days of Rest

Just as the title states, I am seeing quite a few stocks set up in nice patterns. They are not all complete right now and I think if we breakout say tomorrow, there is probably a greater chance of failure in these patterns. If we continue to pullback here like today, in a calm and controlled manner, which will allow us to work off some of the overbought conditions in the market, these charts will look super and I would be interested in going long in many of them on a breakout. The best part is many of these are newer names - not the same old leaders in the materials and commodity sectors. That is a good sign for bulls out there.

Charts from Telechart2007, Courtesy of Worden Brothers, Inc.

What about shorts? I still have the ones I posted last night on my watchlist and am prepared to act if we selloff in a severe manner. Will we? I don't know. No one does. After yesterday's afternoon reversal and bad earnings news, I was expecting more intense selling today than we got, so I am not as bearish as I was yesterday. I am going to tighten my stops on the shorts I took yesterday and go from there. Remember that we are still in a tight range, and it is possible to break out in either direction. Therefore, be ready for both an upside or downside breakout, and act when we get a clear signal. That is what I plan on doing. Good luck tomorrow.

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