Red Hot Momentum
Oil stocks are under pressure this morning, there’s a big OPEC meeting tomorrow that will probably dictate the short-term movement of oil stocks.
Market continues to be extended by many measures, that at times means something other times it doesn’t. The longer your time frame the more irrelevant these short-term measures are. One interesting breadth measure that confirms that we are extended is Pradeep Bonde (Stockbee) breadth measure of how many stocks are up +50% or more in the last month. That number is now at 35, typically above 20 signifies a hot market and this when momentum starts to wane.
With the above being said; the questions as trader that you ask yourself are;
- Do you take the trades at regular size and disregard the breadth numbers?
- Do you reduce size to take into account the breadth numbers?
- Or do you not take any trades until we consolidate further?
- Fact is, we won’t know what is the correct thing to do until after the fact.
Below are the stocks on my watchlist today that I have an interest in on the long side if and only if they go through yesterday’s high.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at firstname.lastname@example.org or 646-480-7463.
This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.
Share This Story, Choose Your Platform!