Saturday, December 17, 2011

Looking Ahead...

Next 5 days: Up
Next 30 days: Down

I'm expecting this moderate bounce we've seen the past two days to continue for a few more days. Some stocks (SOXL, ERX) are right against support and can probably be played for a quick trade this week. These same stocks are oversold, so it makes it more likely for the bounce to continue.

With pennants forming everywhere we need to be careful since we could see a break in either direction. Don't be caught long if everything breaks to the downside. If that happens it could be a long way down. Stops are very important in any trade this week.

The weekly charts don't look as promising. Most stocks hit resistance a week or two ago and are on their way down. Although, I expect the bounce to continue in the short term, I'm expecting things to be gloomy over the next month or so. Most stocks I'm looking at are reaching the end of the pennants so I would expect us to break out of this 4 or 5 month range we've been in sometime in February. At that point we'll know what the first half of the year will bring us.

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