I spent the majority of the day away from my desk due to light holiday trading, there are some areas of strength in the market that momentum traders can focus on. I’m just not finding many decent entries in stocks over the past 4-5 trading sessions. I trimmed down the few positions that I still have in the morning session, but haven’t added any stocks lately. That doesn’t mean I’m not watching, it just means I’m exercising patience with what I do buy.
Below I’ve included charts of REE GMO VLNC SIRI that are displaying picture perfect bullish action. I’ve outlined the base by the black box and you can clearly see the breakout with massive volume. Regardless of whether the markets correct or not, these should do well when the markets come out of that consolidation. I’m of course assuming a correction is looming, but it doesn’t necessarily have to happen, and if that’s the case these stocks will likely lead their respective sectors.
In my opinion the best way to play these momentum stocks is to wait for a low volume pullback, while monitoring the general market. I highly doubt they’ll come all the way to the breakout point as like many previous time, strong stocks rest just for a few days before taking off leaving many traders behind.