If you follow technicals then you know Thursday was a critical day in the stock market.
Although all 3 major indexes closed with substantial gains it's important to take a hard look at what happened early in the session. The S&P 500 sank beneath its October 10th low of 840 during intra-day trading while the Nasdaq crashed through technical resistance, too.
But around lunch time institutional investors came into the market and generated a monster rally which sent the Dow soaring. Just as fear drove the market lower, this time it fueled the rally with investors worried that they might get left out of the upside.
Can we hold the line?
One of the first market technicians to call a bottom was Oppenheimer’s Carter Worth. He expects this bottom will hold and that the violent moves this week are, in fact, optimistic signs. “The market is in the throws of pricing in all the bad news that’s coming. It’s in a process of stabilizing and healing.”
As we’ve told you before Worth recommends being all in, on the long side. And that’s a controversial thesis to say the least. But once again he tells Dylan Ratigan, “It’s right to take the road less traveled. I think one is better served by buying and not selling.”
Worth finds two stocks attractive. They follow:
Patterns in both these charts appear to be bullish to Worth. He says, very succinctly, “get long.”
What do you think? Tell us now!
To see Carter Worth’s entire technical analysis please watch the Word on the Street video.
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Trader disclosure: On Nov.13, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (UUP), (WMT), (DIS), (MGM); Finerman's Firm Owns (MSFT), (UNH); Finermans Firm Owns (OIH) Puts; Finerman's Firm Is Short (IJR), (IYR), (IWM), (MDY), (SPY), (USO), (BBT), (VNO), (COF), (USO); Pete Najarian Owns (AXP) Put Spread; Pete Najarian Owns (CROX) Call Spread; Pete Najarian Owns (FXI) Put Spread; Pete Najarian Owns (LVS) Call Spread; Pete Najarian Owns (MU) Calls
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