Halliburton (HAL) setting up nicely to the long side this morning. I took a long position in it at $34.16. Now the question is likely to be asked, why am I still adding long positions at this juncture in the market. For one, we haven't broken down yet, and haven't broken the 1430 SPX key price level that is necessary. Secondly we are still trading in an uptrend channel off of the 6/4 lows, so its hard to load up positions to the short side (though I do hold two positions short).
Finally, there are plenty of stocks out there that because of the weakness from the previous four trading sessions, are at critical support levels, and if they hold, and this market holds, we could very well see a sizable bounce. And because, our risk is fairly tight on the trade like the one here on HAL, I don't have to lose much capital before finding out whether the trade will ultimately be a winner or a loser.
On the flip side, shorting the market here is a lot riskier as we are short-term over sold, and a lot of stocks that would've been nice to short, have already made sizable moves. So if you're a bear, you are better off waiting for that bounce in the markets before getting short in any additional manner.
Here's today's lazy trades long and short.
Long: Halliburton (HAL)
Short: Dominion Resources (D)
Ryan (@shareplanner) specializes in swing trading strategies and is the founder of SharePlanner which he created to help and teach others on how to trade stocks better using multiple approaches and time frames. Each day you can count on Ryan to provide his trading advice as well as transparency in every trade that he makes. Ryan Mallory resides in Central Florida with a wife of seven years as well as one lively son. More >>
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