Good evening StockBandits!
Red, green, red, green…the market has become a bit indecisive here, ultimately resulting in lateral price action in the past few sessions. While we saw sharp rallies on both Friday and Tuesday following declines, the fact is that neither has produced any follow through. We’re sitting right near recovery highs and suddenly the bulls seem a little hesitant to really press their edge.
Today’s action was really messy intraday with a soft open being followed by a mid-day push into positive territory. That didn’t last long, however, as mid-afternoon selling took out the morning lows on the NAZ before a minor late-day recovery attempt. In the end, all those intraday zig-zags resulted in very minor net changes from last night’s closing levels.
I noted last night there wasn’t a lot to show, and that’s partly attributed to some increased volatility over recent sessions, as well as my unwillingness to lower my standards when it comes to setups of the highest quality. I continue to feel that way, and will stay selective and patient with setting up new plays.
I will begin sharing a nightly grid of the swing trade candidates right here inside the Blueprint, including their entry/stop/target levels, as well as earnings dates (if available) and whether or not they have triggered. I’ll also denote removals and additions, as well as highlight any targets which have been hit and stop adjustments when applicable. Tonight I’ve adjusted a few of them which have made good initial progress and which warrant adjustments. This of course reduces risk while keeping the potential for reward wide open.
As a reminder, I am doing another webinar tonight in conjunction with MoneyShow in case you missed the one I did last week. This will cover many of the same topics with a few more examples and details, so I’d love to see you there!
Also, be sure to submit your Chart Requests for tomorrow’s Charts on Demand video where I review YOUR charts!
Let’s get to the charts.
NAZ – The NAZ finished negative today with an inside bar on the daily chart, unable to build on Tuesday’s strength. 3196 remains the big hurdle for this index.
SP500 – The S&P also painted an inside day with today’s bar and continues to churn beneath 1515.
RUT – The RUT finished strong today with a surge higher in the afternoon to end the day just a point from its high set last week of 912. There still seems to be no letup in this index, indicating the appetite for risk has yet to subside.
DJIA – The DJIA stayed within Tuesday’s range and continues to churn between a pair of short-term levels at 13860 and 14020.
Notable Names:
AAPL is moving laterally here, caught between the $466 area (tested again today) and $435 support. These short-term levels are the ones to watch, but for the bigger picture this low-level basing action may actually prove bullish. Following a selloff from $705, this stock has been severely punished. I’ve found that after a selloff of that magnitude, some basing action helps to stabilize the stock, at which point a slow grind back up may have a better shot at sticking. I’m not bullish on AAPL yet, simply pointing out that this churning action still has potential to develop into something more positive for the stock. Tops and bottoms tend to be more of a process than an event, and it’s certainly possible this is part of a bottoming process (until proven otherwise).
GLD is starting to pressure the downtrend line that began off the November high, which currently stands around $163. A turn up through that level would help to confirm the higher lows which have emerged in recent weeks as being bullish. Such a move would allow for a rally back toward key resistance at $174 where this ETF twice failed in 2012 (Feb. & Oct.).
GS is exhibiting great strength here. Traders are often eager to call a top or a bottom, claiming that a move has carried too far, too fast. While those often lead to pullbacks, it’s difficult to argue with a solid trend. Here, GS is in a ladder-type climb just moving laterally at times to let the lower rising trend line catch up before lifting again toward the upper end of the rising channel. Keep in mind, a break of the rising trend line at $147.50 wouldn’t necessarily mean a change of trend but simply a change of pace. This stock has carried a long way, as have others in the sector, but uptrends are intact and it’s usually best to wait for some failed bounces and/or lower highs to emerge before considering the short side in names like this.
New Swing Trade Candidates:
These stocks look ready for imminent multi-day moves. Pattern confirmation occurs with a move through the entry level. Initial stop and target levels are also provided.
FWLT is in a tightening wedge here after a nice push to highs, and this compression pattern could produce another nice lift if resolved to the upside. I’ll get long if $26.75 is cleared to the upside, and will use rising support as my stop. The height of this wedge is slightly over $2, so I’ll be setting a conservative target for this play to that effect. With earnings a few weeks away, I’m going with a single target rather than two.
ROSE has acted well since mid-December and now is coiling inside this wedge pattern. A projection out of this would be the height of the wedge, which is slightly more than $4. I’ll be setting a single target of $4 since earnings are due out later this month. I’ll get long upon an upside break of $53, and will use rising support as my natural loss-cut area for a stop.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
New spreadsheet looks great!
Thanks Peter, glad it’s helpful. Going to quickly run through the swing setups in the Charts on Demand video this afternoon, so if you’re interested in my comments on them I’ll lead off for a couple of mins with that. Enjoy your day!