The news often provides a catalys for large moves in individual stocks and in the market as a whole. Most people, however, manage to lose big when they trade the news by buying good news and selling bad news blindly. This does not always work because the news does not mean anything in and of itself, it simply brings peoples attention to a stock, sector, index - and from there pre existing trading plans and emotion take over. Often times you will see a downgrade in a stock with a decent technical bottoming pattern (for example) and the upside will be very good.
As an example, here is the News You Can Use Letter from 7/3/2002.
Just for fun lets do a pop quiz to start things: When was the last time the Nasdaq had a month that ended in the green? Novermber of 2001! There has not been one this year at all! Dispite this, most investors are still more afraid of missing the much hyped bottom than of going broke. Speaking of the bottom feeders, however, you do need to be on alert for upside. We are very oversold and at multiyear support.
Concord Communications (CCRD): The stock lowered its guidance for the third quarter last night. It has rallied to a higher high and was attempting to make a higher low on the daily chart at support. Look for buying opportunities.
***Xilinx Incorpoarated (XLNX): The stock was downgraded by Merril to NT Neutral from NT Buy (anyone know what the "NT" means?). The stock is at strong weekly support and could form a double bottom here. Look to buy on strength.
MicroMuse (MUSE): The company expects Q3 revenues to come in at $35 million as opposed to previously expected $38.3 million. There is a possible double bottom on the weekly chart. Look for buying opportunitis on strength.
Bob Evans Farms, Inc (BOBE): The company reaffired guidance last night. The stock is fairly extended, look to short weakness.
Brinker International (EAT): Upgraded to strong buy at Lehman Brothers this morning. Look to short on weakness.
***MBNA Corp (KRB): The stock was upgraded to hold at CIBC. The daily and weekly charts are very weak suggesting shorts. Look for shorting opportunities on weakness.
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Each mornning before the open I will post a list of several stocks that have a news catalyst that could move them, and technicals which might support a move against the "logical" direction given the news.
Brandon
As an example, here is the News You Can Use Letter from 7/3/2002.
Just for fun lets do a pop quiz to start things: When was the last time the Nasdaq had a month that ended in the green? Novermber of 2001! There has not been one this year at all! Dispite this, most investors are still more afraid of missing the much hyped bottom than of going broke. Speaking of the bottom feeders, however, you do need to be on alert for upside. We are very oversold and at multiyear support.
Concord Communications (CCRD): The stock lowered its guidance for the third quarter last night. It has rallied to a higher high and was attempting to make a higher low on the daily chart at support. Look for buying opportunities.
***Xilinx Incorpoarated (XLNX): The stock was downgraded by Merril to NT Neutral from NT Buy (anyone know what the "NT" means?). The stock is at strong weekly support and could form a double bottom here. Look to buy on strength.
MicroMuse (MUSE): The company expects Q3 revenues to come in at $35 million as opposed to previously expected $38.3 million. There is a possible double bottom on the weekly chart. Look for buying opportunitis on strength.
Bob Evans Farms, Inc (BOBE): The company reaffired guidance last night. The stock is fairly extended, look to short weakness.
Brinker International (EAT): Upgraded to strong buy at Lehman Brothers this morning. Look to short on weakness.
***MBNA Corp (KRB): The stock was upgraded to hold at CIBC. The daily and weekly charts are very weak suggesting shorts. Look for shorting opportunities on weakness.
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Each mornning before the open I will post a list of several stocks that have a news catalyst that could move them, and technicals which might support a move against the "logical" direction given the news.
Brandon
