The broader stock market averages continue to surge higher and stretch deeper into the overbought territory. Even though they could stretch the rubber band further, overhead resistance is the concern. That is why I'm beginning to get cautious going long. I feel a pullback, or at least a pause, is in the cards.

One of the companies that has not benefited from the rally in the market over the last couple weeks is Martha Stewart Living Omnimedia (MSO). So a word to the apprentice: “You're fired!" Over the last couple months, every sign of a rally in the stock has been met with strong selling. Let's not buck the trend, but take advantage of eager selling.

Martha Stewart Living

If MSO takes out the lows from Monday, it should at least probe the lows from last week. At the risk of being redundant, use stops especially in the current, choppy condition of the market.

Tom Incorvia is a swing trader with 18 years of experience in the financial markets.  E-mail him at tincorvia@gmail.com.