Watchlist Candidates

Yesterday I gave you quite a few charts that are all in top formations and a timely list it was.

Here's the idea...

ISYS was one of the candidates and what most of them shared in common was a top formation and most had broken down below the top. The Backbone of the uptrend and the top is broken. Now it's a question of tactics for the best entry possible.

What we want to see is a "Kiss" or an upside break of the neckline (which is where the stock broke down, here around $11.50). A kiss of the neckline used to be very common, now it is increasingly common to see an upside violation of the neckline and a move back into the top. Remember though, these are short term tactical plays by Wall Street, the trend is broken, the top is broken, it's all about shakeouts and we can use this to out advantage. Note ISYS is up over 1%-a lot more then the broad market and a LOT more then the sub-industry it belongs to. This is a tactical move by Wall Street traders and we want to use it to our advantage.

Keep an eye on the watchlist for stocks making a move up toward the neckline or above it, those will be your short list (both short selling and highest probability candidates).

Once this happens, you can always email me for ideas on set ups that will work for you.