Last week I noted the Nasdaq might be putting in an unusual triple head & shoulders, with support at the 4050 level.
So far that’s worked out, but I’m not cheering yet. Instead, the market is muddling about, as we wait for a big move. If that move is above 4150, the bulls are back in control. I’m doing very little until then.
Today, I wanted to look at stocks on the slide, with the key knowing when to jump back in. You can buy on strength or weakness, but with stocks in a downtrend channel, waiting for a breakout isn’t a bad way to go.
Let’s look at Tesla (TSLA) first. The slide has knocked about 25% of the share price, but if it breaks the downtrend, I think it comes roaring back.
Amazon (AMZN) is in a similar situation. A solid close north of $300 would be a buy signal.
Back next week to see if we’re in muddle or breakout mode.
Gary B. Smith joined FOX News Channel in 1999 and is currently a regular commentator on "Bulls & Bears," including his own segment called, "The Chartman."