In Volatile Markets, Focus On Price

by: Stock Traders Daily

The Markets have been wild recently, and that will cause some people to make serious mistakes. This is almost always the case when the markets move up and down by 1.5% a day like the NASDAQ Composite ETF has (QQQ) recently. Other markets have been volatile too, and the volatility may not subside anytime soon.

Some pundits are going to try to explain to you why the market is acting volatile, and if asked I could create an argument that suggests the market was bought up without merit late last year to dress up portfolios and now many of those buyers are taking money off of the table while a void of new buyers exists, but even that would just be noise to the layman.

People who own stocks want to know what they should be doing with their specific stocks, so this is what we will focus on. We have a set of rules we follow at Stock Traders Daily, and those rules are based on one important thing. We care about price because price is all that will make us money in the Market. As much as we might love a product, expect solid earnings, or embrace management teams, the continuous theme is that price is what matters to making money in the stock market, so the stocks below are being evaluated based on price.

Chesapeake Energy Corporation (CHK)

Trading Report

Testing longer term support

Autodesk, Inc. (ADSK)

Trading Report

Testing longer term resistance

Oracle Corporation (ORCL)

Trading Report

Testing longer term resistance

Aetna Inc. (AET)

Trading Report

Testing longer term resistance

Our rules tell us that stocks like CHK, which are testing support levels, could be candidates to buy, while stocks that are testing resistance like ADSK, ORCL, and AET are much likely better to sell. I don't want to oversimplify the rule, but for the layman out there we want to buy near support, and sell near resistance levels, and those are defined for us by watching price.

According to our immediate observations of the stocks in this article, most of the stocks highlighted in our observation today had been testing resistance; so far more of them were flashing sell signals than buy signals. In fact, the ratio is 3-1 sell to buy.

If you are looking to make money in the stock market do not be confused by the wild swings in the market recently, but don't take your eyes off of the ball either. The recent moves can confuse some people, but if you just pay attention to price you should be just fine.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: By Thomas H. Kee Jr. for Stock Traders Daily and neither receives compensation from the publicly traded companies listed herein for writing this article.

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