With the markets able to stabilize somewhat last week this will be a crucial week. While we remain bearish overall, due to the weak technical back drop and poor fundamental data of late, we’d prefer to be bullish heading into this week. Reason being, everyone else is bearish, so we want to get on the other side of that trade in the immediate short term.
Furthermore, the market is hovering about 1% above a key support area (we’re watching S&P 1,250-1,257), so we feel that our risk is somewhat minimized. So if the market breaks below this key support level, which is only 1% away, we’ll simply exit any bullish positions with minimal losses. We feel that it is prudent to pick the right spots to go against the consensus. In our opinion, the current set up the markets are offering, presents one of those “right spots” because we know where our risk is.
With the economic calender bare today, trading will likely be swayed by technical factors as well as developments from overseas concerning the debt situation in Greece as well as domestically. We’ll be watching JCOF closely as we expect it to trade very actively and offer some good intraday trading opportunities. For you big board players out there, take a look at YOKU. The stock has gotten slammed the last few weeks but appears as if it is attempting to put in a base. Priced at $28.01, we like the risk/reward set up here because we feel that if the stock has indeed bottomed, it will not trade below $27.50 again. That allows us to enter the trade and put a stop loss that is less than 2% away from the current level so our losses would be minimal if we got stopped out. The flip side of that is the potential for a move back towards $30 or even higher which could net a profit of more than 7%. This is a profit/loss ratio of nearly 4, which is a tough set up to come across.
Did you know that you can watch Stockhaven trade live in real time?
Learn how to daytrade by watching someone else trade! Watchhimtrade.com is the only site that lets you look over the shoulder of a professional daytrader.
Watch this video now where he shows you how it’s possible to make 100% in just 5 minutes!