Morning Market Thoughts
Good morning. Futures are up this morning as we follow through on the shot across the bow. After a couple of days of fast selling of the high flying Nasdaq stocks, most are rebounding and working themselves back into their established ranges.Just a simple note this morning about trading oversold conditions. These are the stocks I mentioned last night when discussing oversold rebound candidates:
$NVDA — Must be above the prior intraday high.
$FB — Must be above the prior intraday high.
$GOOGL – Must be above the prior intraday high.
$AAPL – Must be above the prior intraday high. This had a pretty severe selloff yesterday and should test at least $150. It was downgraded yesterday, but no one seems to care this morning.
$NFLX – Must be above the prior intraday high
$AMAT – Must be above the prior intraday high. Tested the 50-day moving average yesterday and bounced with surprising commitment.
$VEEV – Must be above the prior intraday high. The selloff was pretty severe on Friday, but the stock is retracing some of that pullback now.
$PRAH – Must be above the prior intraday high.
You’ll notice that all of these stocks, in order to meet my criteria for buying, must be above yesterday’s intraday high. If they are not, then the selling isn’t quite done. I want to know that everyone who bought yesterday is a winner today. That takes near term resistance out of the way and frees the stock to move higher. But note that if they are too high from yesterday’s close, there is always the danger of a gap that fails. This is something that you should always be considering. You don’t want to chase a stock up too much at the open because a stock that gaps up very high is in danger of petering out as traders take quick profits.
See you on the other side of today.
–Dan
Market Update