Sunday, May 21, 2006

Watch list for week of 5-22-06

I don't have any new market commitments lined up for this coming week. The recent sell-off has been on huge volume, which is a big negative. Market breadth is terrible now, which you can clearly see on the Nasdaq summation index ($NASI at stockcharts.com). There are also more stocks making 52 week lows than are making 52 week highs. Still, I can't help but think that we're at a short-term market bottom. The most compelling evidence is found on the weekly chart of the nasdaq. 1) There is a decent wick on the bottom of last week's candle, 2) it sits very close to the long-term lower-channel line, and 3) it sits close to its 50 week moving average.

I'm net long right now, sitting in a little more than a half dozen outperforming stocks. All of my weaker holdings have been cut over the past three weeks. This means that I'm in a good position to watch how any rally behaves over the next month or two. If it craps out without my stocks moving to new highs, then I'll dump them, hopefully at an optimal time and probably start to pick up some short positions if the trend on the nasdaq weekly chart changes to down. Basically, I'm going to play this just like I played the market in Q1 2005 right after the naz cracked in the first couple weeks of January.

Here are the highlights from my market homework software this weekend:

1 Comments:

At 7:28 AM, Blogger Aditya Kumar SIngh said...

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regards
aditya

 

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