On Thursday, we will be on the lookout for some Sinker action, with Covance (CVD) at the top of our interest list. We will look for the stock to attempt a breakout move to the upside and reverse lower through the closing price to trigger a potential short sale with a target of approximately 50% of Wednesday’s travel range.

Humana Inc (HUM) is also a Sinker setup. The parameters for the potential trade are the same as the previous example. An attempt to rally above the Wednesday high, followed by a move lower that violates the close will preceed any short sale on our part.

Covance (CVD)


Humana Inc. (HUM)


On the long side, Everest Re Group Inc (RE) is a Fast Ball with potential upside. We will look for a move above 105.50 to trigger a long-side entry on broader sector strength.

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Adrian Manz is the author of Around The Horn: A Trader's Guide To Consistently Scoring In The Markets and is co-founder of TraderInsight.com. Email him at adrian@traderinsight.com.