If we get a bounce tomorrow, don’t blindly load the boat. Yes, it could be the beginning of a reversal back up, but it might also be a trap and dead cat bounce. One of the ‘safer’ reversal approaches is to keep an eye on stocks that have a lot of visibility – the IBD50 list is a good place to start… stocks considered fundamentally sound and favorable for future growth.
In other words, during this pullback, stepping back in long is risky and one approach is to step back into stocks more likely to have broad support from investors, institutions, and traders.
Here are a list of IBD50 stocks technically attractive if the market turns north (tomorrow morning’s economic data will have a lot to say about this):
CRR – watch for breakout of falling wedge and tightening trading range.
SWI – over 25 horizontal resistance. This stock has held up well during an ugly overall market evnironment
ABV – cup and handle over 32 (daily chart) is worth watching
ACOM – bounce off of horizontal support and sma100. definitely not long if it falls under sma100
LCAPA – bounce off sma50
CHKP – bounce off sma50
MNTA – over 20. It failed today, so it might be wise to let it confirm the move above and wait a day, or so, before entry.
AAPL – watch for 330 horizontal support
HANS – nice consolidation. watching for next leg up
DLTR – one of my favorites – consolidating down (triangle). Looking for next leg up
OPEN – sma200 bounce on watch
AGP – careful – the fall below sma50 was the first this year. could be more setup for a short than anything else. Watch to see if it can get back above
TIBX – horizontal support and sma100 support. possible bounce play
CMG – horizontal support and sma50 support. possible bounce play
ILMN – testing horizontal resistance established in February.
INFA – trying to hold trendline support