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What we are to expect in the markets this week will be somewhat of a toss up. Will the selling action continue or was it just a one day anomaly based on the events of some major news?
Usually I would go with the anomaly option, but trading volume was pretty significant on this recent sell off. Considering that many traders were already looking for a market correction, the events that unfolded with Goldman Sachs might have just been the trigger signal everybody was waiting for to break the rally.
All in all, I wouldn’t be surprised if we see a minor pullback, which should welcome some more buying opportunities. Whatever you do, in this type of market, make sure to keep your stops tight.
Below are some of the charts I am looking at.
S&P 500 – Using the fibonacci tool, I wouldn’t be surprised to see this market come down to around 1140. Remember your market timing.
Bank of America (BAC) – There is no denying the massive red volume block which is paired with the recent selling, yet this stock still managed to stay within the upward channel. While the financials could be screwed for the next couple of trading periods, remember to keep the supports and trading zones in mind.
JA Solar (JASO) – Remember that bounce off the 200-day moving average I told you to play? Well, 40% profit later this stock is looking to make some more moves. Watch to see if this stock bounces off the support at $5.60.
Clearwire (CLWR) – Slowly but surely this stock has been inching higher within its overall trend. Just see my last call on this stock. Should this move hold, look for another bounce around $7.15.
Constellation Energy Group (CEG) – Just like most of the charts on this list, the support level is playing a key role. Obviously, for this chart, we are simply looking for a bounce off the first support. If that breaks, then look for a bounce off the second.
AK Steel (AKS) – While the overall trend for this stock has been broken, I wanted to point something interesting that has happened to this stock over the last couple of months – downtrend channels that breakout to the plus side. Lets see if we can get the stock to do that again here.
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