Resistance is Broken
11/14/2006 7:38:31 PM
Last week I sent out an intra-week alert suggesting we would start issuing long stock recommendations more often, until the uptrend was broken. The stealth rally did occur and appears to be leading the way upward.
Note: Thank you to all of you who responded to my intraweek alert. I received mixed responses from subscribers who welcomed the idea of some short term trades, and others who were happy that recommendations weren't being made with the thought that it is better not to trade, than to trade and lose. I will try to satisfy both by wading into the long trades slowly to minimize risk of a sudden downturn.
I also suggested the markets might move to the downside Thursday morning, and they did. However, resistance has been broken, first yesterday with the QQQQs moving to a new high for the year, and today with all major indexes moving forward. The bulls are willing to commit the capital and keep buying into this rally. We need to look for momentum plays until this rally breaks, rather than pure reversal plays.
With that said, I was going to recommend a long entry into QCOM this morning but for the immediate equity market sell-off at the gap up open. In hindsight, it would have been a great entry point, but alas...
We need to exit our SPY position tomorrow as the strong volume today indicated this break through is likely to continue. This level ($139) is likely to act as support as it acted as significant resistance for awhile. An exit at around that price would be desirable. I am also going to look for a long trade entry to recommend as well.
Please feel free to send emails with any questions you may have.
Regards and Good Trading,