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Monday, September 08, 2008

Watch for Potential Bear Flags Formation

We saw the high volume sell-off in the markets last week. So what's next? I believe the next few days will see consolidation or some retracement of the sell-off, so now is not the time to go short or buy put options. I would watch the following sectors for potential bear flags formation in this coming week:

-Agriculture
-Dryshippers
-Steel
-Energy
-Coal
-Metals
-Technology
-Utilities

Here's a few charts to show the near vertical down move accompanied by high volume- characteristics of potential bear flags:

Research In Motion Limited (NASDAQ:RIMM)



DryShips Inc. (NASDAQ:DRYS)


Peabody Energy Corporation (NYSE:BTU)

Exelon Corporation (NYSE:EXC)



Quite a quiet week ahead in terms of economic news.

Tue: Pending Home Sales, Wholesale Inventories

Thurs: Initial Claims, Trade Balance, Treasury Budget

Fri:
PPI, Retail Sales, Business Inventories, Michigan Sentiment

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