Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Pullback Trade Ideas

|Includes: Magna International Inc. (MGA)

As this market continue to set new highs, it’s important not to chase stocks. I see nothing in the Nasdaq charts that imply we’re going to correct, but I would like to see some sideways action to consolidate these gains (I realize I sound like a broken record). The Dow has really been the leader and is seeing signs of moving too far to fast as seen by the 4ema moving above the Keltner channel here. Typically when this happens the markets are overbought.

SOLR and ALY both represent stocks that are undergoing a correction but look as if these pullbacks have almost run their course.

MGA doesn’t have a clear technical pattern to base a buying point off of but I believe the 50 moving average will provide support based on the extreme bullish of the long term chart. This continues to plow ahead and hit unchartered territory. In fact, we may have seen the lows last week as the 50ma slopes upward and the next touch will be higher than last weeks low. (See 60min chart for a closer look at the intraday action). The fact that the RSI refuses to go below 50 illustrates the strength of this chart.