Given the horrendous decline in shares of Tableau Software (DATA) during Thursday's after-hour session, I have no doubt some of you will be anxious to try and pick a bottom in the name on Friday. But unless you are a genuinely accomplished intraday scalper, I would strongly encourage you not to. Stocks like DATA that wind up gapping to new all-time lows on the back of an earnings release rarely offer substantial long-term value.
If you insist on trading DATA, be it intraday or over a higher timeframe, consider sitting on your hands during Friday's session if the stock is not trading above both its opening print and the session's volume weighted average price (VWAP)
We last discussed the Utilities Select Sector SPDR (XLU) in the Feb. 1 Trader's Notebook, but given the ETFs continued rally, I thought it might be worth revisiting the idea. Previously, I noted the area of low volume rejection near $46.50 and suggested caution on the part of bulls was warranted near that level. With the stock currently trading within that area, the chart below might serve to further explain why chasing momentum in the XLU at or above current levels is a bit dangerous.
As you can see, the XLU has rallied sharply from its balance area between $42 and $44.50. My view on the stock, however, isn't particularly bearish. Rather, I suspect the stock begins to rotate in an increasingly volatile range between roughly $45 and $48. I'd rather own XLU than sell it short. But if I opted to buy it, I'd prefer to do so once the 21-day exponential moving average has moved higher to support price.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at email@example.com or posted to my twitter feed @ByrneRWS.