Before I talk about The Pantry and Silicon Laboratories, I want to mention something about the current action in the stock market. I’ve been very picky with my trades the last few sessions. That starts to occur when we’re trading in a market environment like the current one. It’s a market where momentum traders rule. You have to buy strength with this type of action. That’s what the momentum players, with the cash to move this market, are doing. They’re not bidding lower, waiting for the market to come to them. No. They’re whacking the ask with a big fat mallet of money. How do I know this? Well, I caught a segment of Jim Cramer’s Mad Money, where he said that the momo boys are back in a big way. A guy like Cramer is able to talk to trading desks that deal with the large market moving orders. That’s the type of information that is helpful from that show.
Two stocks that have set up possible day trading setups are PTRY – Pantry Inc and SLAB – Silicon Laboratories. What do I like about each setup? They both have pulled back to their respective 50 day moving averages. SLAB and PTRY also put in the narrowest trading range in the past seven days today. An NR7. Generally, you can expect greater volatility when the stock breaks that small range. You’ve got the added bonus of the moving average as an area of support. Combining fluid pullbacks, or pullbacks that fall to major moving average support, gives the trader some points to trade off of in the game of supply and demand.
PTRY is currently in a sell signal with the lower low red bar before today’s NR7. Watch for a break below the 50 day as traders long the security will set stops there.
Trade Consciously! jim cramer mad money pic source
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