Keep a Level Head in this Market

• Posted by Greg Harmon
• on March 13th, 2014

If you were looking for words of comfort or wisdom’s about the broad market, I apologize. They will come in the morning. But this is about keeping a level head, just in a more specific manner. When markets are pulling back it reveals which stocks are acting strong. Or at least stronger. One of those that was on my secondary watchlist is Level 3 Communications, $LVLT. This stock has had a strong trend higher since September, and that got it noticed. But more recently it pulled back from the trend resistance only marginally and has been moving sideways. And then today, Thursday, a strong down day it was down. But did not break the sideways channel. This sets up a two way trade

opportunity. If it does break, becoming weak, under 36.75, it is a good short opportunity to at least a touch at the 38.2% Fibonacci level at 35.89 but there is a relative vacuum of previous price history down to 30.67. But in the realm of keeping a level head, notice that the RSI is holding in bullish territory while the MACD has worked lower and is starting to level off. You need to also be prepared for a move higher. And with the 23.6% Fibonacci at 37.13 as a stop, a start higher Friday can be played to the upside.

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