Most technicians are worried about 200 DMA resistance for DOW, S&P 500 & Nasdaq...
Before we look @ that, we need to understand how those indices have fared so far, here are the numbers :
S&P 500 UP 324 points or UP 13.81%
DOW UP 3006 points or UP 13.85%
Nasdaq UP 967 points or UP 15.62%
For the record all of the above gains happened in last 17 trading days....
How would you rate this almost 1% gains per trading day average, this is definitely not a norm BUT when we have been going down for almost 3 months or down 20% + on average and stocks losing almost 50% on average, an snap back of this magnitude is not out of line.
On top of technical factors of being deeply oversold plus new allocation for 2019, this can be justified easily.
Going above 200 DMA is not issue, but when is more of a relevant question.
My take is 200 DMA may bring profit taking and may push averages below 200 DMA.....
BUT 200 DMA is not a significant resistance which cannot be overtaken in short order.
Many many stocks are barely above their lows in this sharp rally, so lot of room to play rotation.
Booking profit and moving into laggards may be right strategy.
Making money in this type of sharp snap back only requires exposure in market, all boats are being lifted not equally but definitely moving UP.
Finding strong stocks in this rotation may be frustrating as some stocks rest while laggards move up sharply.
Keep an eye on your picks IF you are trading even for daytrading or swing trading.
For long term investors, pick good sector and leaders in that sector, ETF may be a very good strategy takes stock picking out of picture, they mimic or outperform their sector, Fidelity, Vanguard are 2 good choices.
Good luck with your own strategy and comfort level.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Stocktrader,
Sold WB $55.35
Added 75% ESTC @ $73.70
Saleem
Hi Saleem,
Good luck with the swap.
Stocktrader
Hi Saleem,
Last week: +0.95% (YTD: +0.25%)
Notable Winners: NEWR TDOC TNA VICR APPN
Notable Losers: LQDA TRIL ORTX
A very negative week from my biotechs muted what could have been otherwise better gains. I am still struggling to make much progress this year after starting off with too little exposure, and now having big drags on the portfolio. I look to keep modifying to try and make things work better.
Holdings: TNA MHO VICR ORTX SAIL VRNS LQDA ACIA VCEL HEAR TRIL NIU, cash 0.2%
Overall I see the market continuing to grind up the wall of worry as long as the Federal Reserve stays tame. This is my major signaling factor to the direction of the markets as both trade and the government shutdown can resolve themselves quickly if the parties desire.
Stocktrader
Hi Stocktrader,
Last week plus 6.31%
YTD plus 57.05%...
Saleem
Hi Saleem,
Your spectacular gains continue, awesome job!
Stocktrader
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