every market day.
Market Call for February 19, 1999
Contributed by Mark Seleznov, TrendTrader.com.
The purpose of this Market Call section is to educate readers in technical= analysis patterns and indicators. As with all investment information, you= need to research information and consult your financial advisor before initiating any strategies that are contained in Market Call.
Also, you must realize that as with all trading strategies, opinions can= change quickly depending on market conditions and developments.
Trading Range Breakout
When a stock trades in a tight trading range, there is a real battle between Buyers and Sellers.
A breakout can be very dynamic when one side takes control of the stock.
Let's look at Centocor, CNTO.
Over the past 2 weeks, CNTO has been in a trading range between 38 and 40. The range is getting tighter and tighter and should resolve itself any day.
Over the past few months, CNTO has traded between 32 and 52.
One way a trader would play a channel breakout like this is Buying at market if it breaks above 40 or Selling Short if the stock breaks below 38.
A $2 stop can be used to protect against a reversal after entry.
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Mark A. Seleznov is a General Securities Principal and Managing Partner of Trend Trader, LLC, a NASD, SIPC broker/dealer firm located in Scottsdale, Arizona. A professional trader for over 25 years, Mark was a Market Maker on the Philadelphia Stock Exchange, a Retail Registered Representative, and futures trader. Mark is an author and recognized expert in equity Day Trading. He conducts seminars in Equity Day Trading and offers his firm traders training and support. If his firm holds any positions in the public companies he writes about, it will be noted at the bottom of his article.
Market Calls is a daily syndicated column on trading by Mark A. Seleznov, Managing Partner of Trend Trader, LLC. For information on obtaining Market Calls for your web site, newspapers, or publication, contact Trend Trader, LLC at 602-948-1146
Disclaimer: Trading in securities may not be suitable for all individuals. Consult your broker or other professional to determine your suitability. This is not an offer to buy or sell securities. The advice given above is of a general nature and should not be taken as a recommendation to buy or sell the referenced security.