Daily Market View | stockbee

2/02/2011

Daily Market View

Big up days tend to be followed by 2 or 3 churn or sideways days. The market often digests the gains. So expecting a muted market.
A big gap up would not be very constructive as it will lead to profit taking in short time frame.
While the indexes would be negative to sideways, it is the actions of individual stocks and setups that is important.
If the move has legs then more stocks will breakout and stock that broke out will have follow through or orderly pullbacks.
Because markets are over extended you will find many setups that are over extended. When stocks breakout from such over extended level they tend to have small moves or tend to fail. As a result the key in this market is to find setups that are not over extended.
My focus will continue to be on Stockbee Trend Intensity, EP, Dollar b/o, and Power Breakouts.
Out of current open positions BIDU, LULU, HSFT, MTL are capable of big moves of 50% plus in next few quarters. So at some stage if they setup well I would look at adding to them once they go up 10% or more.
A reversal of gains here and a 300 plus day to the downside on 4% breakdowns would be a big problem for market and so it is important to be prepared for it mentally and be willing to take evasive action immediately if that happens.
Overall with less than 3% at risk I am comfortably positioned and looking at market one day at a time...

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