“Bears Are Fast and Bulls Are Slow”


Rule #35 “Bears are fast and Bulls are slow” might be a good rule to remember this week because a few recent winners may have a decent size pullback before finding better footing and moving higher once again.

I’ve always found that tradable selling occurs in quick spurts for strong stocks; so it’s important be ready to get in and out quickly when this happens to maximize your gains. Pullbacks are technically necessary for any stock when it runs out of momentum and needs to find new support for further advancement. It’s just that simple and once a trader develops his knowledge of support and resistance strengths; then they can fairly accurately short relatively small pullbacks or simply sell positions to protect their profits.

After reading my article “The Charts Precede the News” I’m sure you’re looking to repeat my success with another stock of your own. So let me see if I can give you a few ideas.

This week seems prime for a very choppy trade in the market so any gains on Tuesday would lead me to sell my long positions and wait until Friday for a better re-entry or maybe even outright short some recent winners. Stocks like PCLN, GOOG, NFLX, AMGN and many others seems to me prime for a 5-10% pullback before they once again continue a bit higher; but increasingly throughout the Summer this market will become a more uneven stock pickers trade and not the momentous index mover it has been over the first 6 months.

Tuesday may give many stocks a strong opening; if this happens it will signal to me that a sell-off is in the cards late Tuesday or Wednesday AM. If we get a reversal on Tuesday from a nice run higher; I’d expect a gap down Wednesday AM in some names that may leave the dip buyers on the ropes and this momentum to the downside may last through Friday or Monday of next week. But like I said; this market will become increasing choppy which means a mixture of winners and losers across the market with quick rotations that will leave your head spinning unless you are anticipating these moves using strong charts.

Stocks To Watch

PCLN should be less affected here to the downside and there’s strong support around $777. A run to $812 may send it back there for a push higher and I still think $1,000 could be in the cards before 2013 ends; still look for big resistance near $900 next month on its way up.

The transports look tired here – I think a smart play this week may be a short near $116 on the IYT; but be ready to cover near $107 if it reverses to that level fast.

MA frustrated me for months on end whiles its program eluded me; but I’ve had it spot-on of late and I’m building confidence in my calls here. I don’t won’t to short it – but a pullback to $545 from near $580 might be worth taking a shot at for a slow climb back to $610.

AAPL might trade up this week to near the $455 area before it falls back again below $440. There’s a very technical setup here developing; but it needs more time to shake a few more weak holders out of their positions on both sides of this trade. Be patient and polite and I’ll let you know when it’s safe to play in the orchard once again. Big money to be made here in about a week.

GOOG has made you some serious money if you stuck to the call from my last article “Winners Anticipate; Losers React”. But GOOG may need more rest than most here because once again too many traders have starting looking to buy the dips; unlike PCLN where too many traders are looking to short the rallies. Don’t get sucked into any rally here on Tuesday and if you own GOOG you may want to lighten up and wait for at least a $50 drop before pulling the trigger again. Let’s see what happens with it on Tuesday and then I’ll update a more precise buy point as one develops.

TSLA might make one more run down here; don’t short it whatever you do because $200 is possible with its momentum and small float; just be ready to pull the trigger if it gets near $82 again soon. This next run higher won’t be denied until $120 is reached.

AMGN may have some trouble soon; a short after a pop on Tuesday AM might pay with a 10% + dip; but keep your loses small if it decides to keep running.

AMZN is not a stock to short; neither is LNKD or AAPL; leave them alone unless you know where and when to buy them.

And lastly NFLX should probably be sold on a nice $5 pop tomorrow; the timing is to difficult here for me to give you a likely trade; but if it reverses don’t jump back in before it breaks $200. Way too many people looking for another pop and the shorts have been beat to a pulp here; so it needs some technical repair IMHO.

I’ll try to post another article midweek after some of my ideas either shakeout or don’t. If you want me to look at a stock just follow me and ask me about it on ST. If I think it has a good trade setup I’ll post it in one of my articles or Direct Message you what I think. I’m limited with my time right now; but I do look at all stocks I’m asked about.

As always – study more than you trade and you will succeed – good luck – PTP –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. #1 by Adam on May 28, 2013 - 2:22 am

    Thank you for the ideas and insights!

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