The point of this site is to provide useful information to the new stock investor, without too much overwhelming technical analysis or fundamental information. Not to hot or too cold, just right as the proverbial saying goes.
Keeping it simple and looking at the SPY to tell us what we need to know, last week was a really satisfying bounce for those who got involved and put some money to work after the Friday 11/16/2012 high volume reversal day. But what do you do now? If you have stocks that are working, let them work, but make sure you have your risk defined with stops set at logical points. That could mean several things, but let’s go with key support levels. If you were trading the SPY, the 20DMA on a daily chart is a logical place to put your stop. It was previous Resistance and now once cleared, becomes support.
There are flaws in the setup going into next week. The price on the SPY is now up at the 50 DMA on the daily chart. If it does nor hold and falls back below, that will encourage some people to sell or get short, leading to a stop trigger. Also, keep in mind, after the very solid up move last week, a pause is in order.
Some stocks to look at if you have too much cash in your portfolio and the market continues its move higher next week.
All three are solid companies, have great charts, and are at logical buy points. More on those charts in the coming days.