By Andrew Nyquist
The markets have melted down since breaking the bottom edge of the flag / pennant formation. Overnight futures indicated a rough start to the week, and have followed through taking out key market support levels this morning. The technical damage is stacking up and this makes stock picking difficult, to say the least. Until the market stabilizes, and Europe provides a solution, investors can expect more volatility and should remain cautious.
One area, though, that may offer a good short term risk/reward for swing traders is the Oil Services sector, and more specifically, the Oil Services Holders (OIH). Commodities have been rocked as investors try to estimate the extent of the global slowdown, and as such, I can only look at this area as a short term trading idea with a TIGHT stop until the clouds clear (sorry long termers!). Another stock within this universe that has a similar if not better setup is Schlumberger (SLB). See annotated charts below. If engaging, don’t be a hero. Sell stops should be tight and set a percent below the lows for the day, depending upon risk profile. The market is grumpy.
———————————————————
Your comments and emails are welcome. Readers can contact me directly at andrew@seeitmarket.com or follow me on Twitter on @andrewnyquist. For current news and updates, be sure to “Like” See It Market on Facebook. Thank you.
No positions in any of the securities mentioned at time of publication.
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.
