Home > Market Set Up > Planning for the week to come.

Planning for the week to come.

Last week the SPY rallied 4 days on average volume and found resistance at its 50SMA on the daily chart. It closed near it’s 61.8% retrace fib level from the lows made at 104.58 on 2/5. So the SPY has two major places of resistance at its current level with 50 day moving average and the 61.8% fib level.

I will be looking for two strategies to play off of these current levels. One based on a continued rally and one looking for a pullback from these resistance points.

Last week, industrial goods had the strongest showing of the week with the sector up 4.2%. Financials were up the second most at 3.5%. If the market does break the resistance then I will be looking at longs in the industrial goods sector mainly BA & CAT. Although, I would like to see a pullback in BA after it’s 4 days of rallying before wanting to get involved. I am still not convinced that financials are on their way up as they are one of the weakest sectors over the past month, so I will concentrate on industrial goods.

BA made new 52 week highs last week.

The laggard last week was healthcare which sector gained only 1.6%. If the market fails to break through its resistance, then I am looking for continuing weakness in this sector. Healthcare is also one of the weakest sectors for the month down -3.6%. Stocks I will be looking at are MRK and BAX. Both are below they’re 50 day moving averages and are setting up for good shorts.

MRK looks good for a short if SPY can't break resistance.

Because I don’t have a crystal ball to see the future, I want to have a plan for which ever way the market goes. So if it rallies I will be looking at industrial good makers like BA & CAT. If it fails to break through resistance then I will be looking at health care stocks.
For a good site to look at the sectors and how they fare on a daily, weekly and monthly level I like to use Finviz.com and go the page under groups. Good luck trading the next week!

  1. Ani
    February 21, 2010 at 10:32 pm

    Above all charts BA look most promising… Rest depends on market direction…..

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