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I'm including a chart of the retailing index here as well for two reasons. The main reason is to follow up on some targets I noted in my commentary two weeks ago. The index played out beautifully off the identified support and resistance zones. Like many of the other indexes, the retailing index put in a nice looking bottoming bar today and could be ready for a brief rally to the upside. I will be monitoring this index closely (what else is new!) for any signs of weakness as I think the chart is showing us that lower prices are still in the cards. The other reason I'm including the chart is to illustrate how the use of many different forms of analysis helped clue us into a very profitable trade. Candlesticks patterns, fibonacci, trendlines all came together for us here and studying this chart can be helpful in identifying similar setups in the future.
Given the potential for some upside in the tech sector, I'm looking at some of the "safe-haven" sectors as potential short candidates. The healthcare-related stocks have certainly enjoyed substantial runs while the tech-heavy Nasdaq has collapsed recently. I've posted a few charts below with my comments on each.
Other stocks to watch in the sector are: (AAS | Quote | Chart | News | PowerRating), (AMHC | Quote | Chart | News | PowerRating), (CMX | Quote | Chart | News | PowerRating), (MMS | Quote | Chart | News | PowerRating), (PATH | Quote | Chart | News | PowerRating), (PRHC | Quote | Chart | News | PowerRating), (TGH | Quote | Chart | News | PowerRating), (TGH | Quote | Chart | News | PowerRating) and (WLP | Quote | Chart | News | PowerRating). Be sure to look at both daily and weekly charts on all of these. Also take note of the many stock rating reiterations coming out in the sector coupled with some pretty substantial insider selling - I think you'll be reminded of some other sectors both Goran Yordanoff and myself have shorted successfully in the past.
Other interesting short candidates I'm watching are in the restaurant sector - these include: (APPB | Quote | Chart | News | PowerRating), (CBRL | Quote | Chart | News | PowerRating), (IHP | Quote | Chart | News | PowerRating), (JBX | Quote | Chart | News | PowerRating), and (RI | Quote | Chart | News | PowerRating).
Happy trading!
Carolyn
P.S. Newsweek's cover story this week entitled "Are You Maxed Out" was very interesting. If you haven't read it yet, the full story can be found at www.newsweek.com - a direct link is: http://www.msnbc.com/news/615517.asp?0nw=n1d It's a must read, in my opinion.
