We've seen some crazy sessions in the market recently with the major indices dropping down to the 50 day moving average. It's not all bad news though, one good thing that has happened in the market is that the price of oil has plummeted. The reason for this is simple, the price of oil is measured in US dollars and the dollar is outperforming all of the other major currencies in the world. So what does this mean for average traders like you and I?
Well, my wife and I are excited to head to Europe this summer. She's looking forward to the art and history, while I'm just happy to know my money will stretch further than it would have a few months ago. Putting aside my personal benefits, the currency situation puts a lot of pressure on companies that derive profits from Euro zone operations.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
So the safe choice would be to focus on US centric stocks for now. Specifically I am looking at stocks that withstood the downtrend and are trading above the 34 day exponential moving average (EMA). I am also targeting stocks that are very liquid, given this market environment. I prefer stocks that have a volume of over $150 million daily for now. Here are 3 specific examples of stocks that meet my criteria:
MYL
DIS
ROST
Keep an eye out for my post on Wednesday where we will highlight the second aspect of creating an effective trade plan - establishing a loss threshold. If you missed the first part of the series, you can review it here.
Please remember to comment on any posts of mine that you find interesting. Establishing a vibrant and collaborative community was one of the biggest reasons for creating this blog in the first place!
Amin
investorspotlight@gmail.com
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