Weekend Review, February 14, 2014

Across the board the major indexes have undergone another V-shaped recovery with the COMPQ and SPX testing new highs while the RUT lags.  Whether this matters remains to be seen, but for the time being there's at least one chart with a head and shoulders pattern for one to hang their hat on.

$COMPQ

$RUT

$SPX

Going into this holiday shortened week I'm optimistic given the number of charts from my watch list setting up continuation patterns.  I return to bar charts from candlesticks yet again as I reevaluate my charts from the perspective of developing one's chart eyes (Kacher/Morales).  I tend to find that the patterns are simpler for me to perceive and I'm able to more quickly and efficiently identify the set ups I'm willing to trade.  This weeks bakers dozen:

AEIS

AER

APOL

ARAY

DHT

DXM

HZNP

SIMO

SMCI

TK

UCTT

VMC

CSII

On my time frame the market I trade looks healthy with a bountiful of opportunities to take advantage of.  Given the V-Shaped recovery it's important to avoid stocks that mimic the markets pattern and look for those that have consolidated in a sideways fashion.  One of the keys for me over the next week or two is the behavior of the indexes when they clip new highs as there has been a strong tendency for this to mark the end of the meat of the move before there is a pullback.  During these periods I've noted that the tactics used have more importance than the overall strategy and that while the later should not wag the dog, the prior are more subjective to the markets whims.  For myself that means more aggressive in profit taking and less forgiving of stocks that lack follow through within a few days of entry.