Daytrade of the Day for 2/3/09

The U.S. Stock Market got a boost from some decent housing data this morning. As a result, it was able to maintain a decent uptrend for much of the day into the close. New building permits and mortgage applications showed a nice rise in the latest month. We've now seen a couple different data series showing some positive signs in the latest reporting period for housing. If we can maintain this current trend, it should ultimately help the stocks market.

Not surprisingly, residential construction was among the top performing industry groups today. The leading group was Toys and Hobby stores, which has been a strong performer of late. Industrial cyclicals such as copper, aluminum, railroads and freight also enjoyed nice gains today.

We've got some stocks making new highs today after breaking out from lengthy bases in the last month or so. Education related stocks such as ESI and COCO are among these. A couple other stocks in other industries are doing well also. We still need some confirmation from the overall market before considering it a safe time to buy any high momentum stocks.

Althoug it was not the biggest mover of the day, IBM produced a nice daytrade after a daily set up that gave us a directional bias to the upside for today. After opening and trading lower in the first 15 minutes, IBM bounced right back and was making new highs by 10:30 am, a strong sign. The stock then traded higher all day and closed just off its highs for the session. The chart may be seen below.

Scott Cole
www.bestdaytradingstocks.com