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Trading Sectors

Trading a sector is not very different than trading a stock. First you must determine which sectors are weak and which are strong.

Then you will open a chart and edit the same settings. Since a sector, for example the semi-conductor sector, $SOX, does not have a volume, you must use a minute setting such as 2 or 3. The corresponding futures chart can also be used to determine trend and your entry points. Below is an example of a two minute chart of the $SOX. Notice how the $SOX does respond to the support and resistance zones, and what happens when intermediate support or resistance fails, as it did around 1120 hours, 1302 hours and again at 1430 hours.

 

 

On the next charts you will see the same ES charts used in the IBM example, and how the two buy areas correlated more precisely than the previous IBM charts. The key point here is, when you entered a buy setup on the ES futures, you were also at or nearing support on the $SOX, and it correlated more precisely than the previous example with IBM.

 

 

 

 

 

 

 

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