Courtesy of All About Trends
Yesterday we went from indecision to watching paint dry to lethargic. Now is it pullback time?
This sideways chop-fest is a healthy consolidation. Look at the choppy action as the multiple attempts of a long jumper making a test runs up to the line. The long jumper might stop, walk back and make another run and might actually make it next time.
The daily charts of the indexes and the names that make up the largest percentages of the indexes (the big tape painters) show that there is plenty of support. Any pullback can be considered stepping back to get another run at resistance.
We're watching big tape painting stocks such as AAPL, GOOG and AMZN.
AAPL, GOOG and AMZN make up a huge percentage of the NASDAQ index. We're throwing in BLK for good measure. Where they go, the indexes go. They are responsible for a large portion of the Nasdaq's movement and they have been going sideways. Run them, run the indexes
The patterns on these charts look like the stocks are range bound or Pulling back Off Highs (POH). These are bullish patterns. IF the biggest percentage names are pulling back off highs, it's a good sign for the indexes.
Our method: Use weakness to SELECTIVELY go long and then sweat it out as long as our positions are holding support. It's buy the dips in select names with structure, and then allow for fluctuations and manage the trade.
Read more about All About Trends' strategy here.
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