MC1000's Day Trader Focus

Two minutes with Greg Capra, Pristine.com,
White Plains, N.Y. -- 12:35 p.m. EST

What’s going on today?

The Nasdaq has been doing well based on the Microsoft (MSFT) news. Most Nasdaq stocks gapped up with the majority of the gains coming in the morning, which is typical of what we’ve seen the last several days. If you are very selective and get in and out quickly, you can do OK.

It sounds like you’re sticking to day trading fundamentals to deal with the choppy markets.

There are a lot of pockets of selling strength. The tick has been negative for the majority of the day today, so most stocks are trading on down ticks rather than up ticks.

When the markets are in a transitional phase such as right now, things that worked two months ago don’t work now. You have to recognize that it has changed and roll with it.

It is important to be able to recognize that things change. There are times when there are home runs out there to be had, and there are times when you have to take small profits and let them add up over the course of the day.

A day trader is someone who has to be flexible and roll with the market. If you want to be opinionated and argue with the market, it sticks its hand in your pocket and empties out your wallet. It will do that every time.

That said, you seem somewhat more positive than other traders we’ve talked to. Why?

One encouraging thing is the strength in financials. The bank stocks have reacted really well of late. One stock I’m looking at is Citigroup (C), which is at its resistance level. If it can continue to move ahead, the market might buck that head-and-shoulders formation we saw earlier.

We talked about the head-and-shoulders technical formation last time we spoke around the end of September. Has your opinion of that usually bearish technical data changed since then?

What I told you when we first talked about it was that these patterns often fail. You just take it day by day and see what is happening. The market has stabilized over the last few days and bounced. We’ll see if it can last.

What specific strategies are you using to trade?

We use support and resistance and a couple of simple moving averages. We’ve been making a lot of use of a short-term scalp where we look for stocks breaking ahead in the morning and gapping up.

Network Associates (NETA) did that this morning. NETA had gapped above its 20- and 200-day moving averages on the five-minute chart. When it started to move up, we entered. Our target was its 200-day MA on the 15-minute chart. It got there, and we got out. We see this happen on a daily basis. These are the type of things that we teach in our seminars. It is very reliable. We’ve used this for so long, that it has become second nature.

Greg Capra, who has more than 10 years of day trading experience, is president of Pristine.com (www.pristine.com).