Good evening StockBandits!
Rotation was the name of the game today as small-caps and techs saw minor outflows while the senior indexes took the baton. The DJIA pushed through resistance to paint a new all-time high, no doubt something that will excite Main Street investors when they turn on their evening news. The S&P edged up to finish within 5 points of breakout territory as well, while the NAZ and RUT each retreated a bit within their high-level bases. So, while the Dow made a new high, the broad market remained range-bound, awaiting a catalyst.
My watchlists became a bit more evenly split tonight between bullish and bearish, which I found interesting. Additionally, I was taken out of a swing trade today in NOW after a nasty downside reversal from the initial strength it showed yesterday upon triggering an entry. I’m finding some difficulty with high-level continuation plays in recent days, so in terms of new swings I’m going to abstain from those kinds of setups temporarily while we wait to see if the broad market continues to churn or if instead it can begin to see more lasting momentum.
The big buzz for Thursday will be the Twitter IPO (TWTR). With the Facebook debacle still fresh on the minds of traders, it’ll be interesting to see how this next social networking giant fares once shares hit the open market. If you’re planning to participate after the stock opens for trading (most likely mid to late-morning), just be sure to keep a stop in place at all times. Highly-anticipated IPO’s tend to move quickly and that can cut both ways, and with zero trading history to go on, there won’t be any pre-existing levels to rely upon. Stay nimble!
If you have chart requests for Thursday’s video, hit reply to this email or the reminder we’ll send out and I’ll put those tickers on the list. All I ask is that you limit it to a very small handful if there are multiple tickers.
Let’s get to the charts.
NAZ – The NAZ made no meaningful headway today as it slid just over 7 points to finish right in the center of its high-level trading range. Until we see a downside break of 3882 or a break above 3966, expect the choppy action to continue.
SP500 – The S&P lifted a bit today to finish just a few points from breakout territory. This index is still just basing near highs, and every day counts after the massive October rally.
RUT – The RUT has seen declines in 7 of its last 9 sessions, although it currently sits just about 2% from its highs. For now, it’s still range-bound with about 11 points of room before support would be threatened.
DJIA – The DJIA reached a new high today as it pushed past 15721. Today’s breakout wasn’t overly impressive, but now this index has room to run as far as it wants. The recent basing around 15600 helped to digest the 1000-point rally, so now we’ll see if the bulls have what it takes to make this breakout stick as the last 2 weren’t able to show immediate follow through.
Notable Names:
TSLA had earnings last night and the stock gapped significantly lower this morning. I don’t hold positions into earnings as I don’t have a way to manage risk, but this 10-minute chart shows there’s still ample opportunity to trade post-earnings even when a gap occurs. This stock saw a $14 move over the course of just an hour this morning. So rather than roll the dice on the direction of the gap, look for an opportunity after the gap. That way, you may still be able to participate without the inability to close out the position in the case of an adverse move in price.
NSC is a stock that’s on my radar but it’s resting here after a minor pullback and looks like it simply needs a bit more time.
LVS looks good for a single-day trade here if it can clear $71.50, in which case I’d be looking for a quick test of the recent high about $2 above the trend line. I’d prefer to see this base tighten before considering it for a swing. Still no negative change of character yet and the intermediate term trend remains up, so this may prove to be simply another dip along the way.
AVGO has been listed here the past few nights but still hasn’t cleared the trend line to trigger a trade. I still like it though for a single-day play above $45.55 with room to run back toward the recent high.
SGEN saw a little progress today but still has ample room to retreat with no nearby support. I like this one again for a single-day play below $37.50 as price makes a new correction low.
GTLS is short-term oversold here but still looks weak. Rather than take it for a swing, I’ll keep it tight for a single-day play on the short side upon a break of support at $99.40.
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.
NCR rolled over hard after failing at resistance and has since tightened to form this bearish wedge. A downside break at $36.25 will trigger a short sale for me as a swing, looking for prior levels to get tested as targets. I’ll have a protective buy stop above this wedge initially in case the pattern triggers an entry and then reverses back up. As with all swing trades, I’ll look to tighten my stop as opportunities emerge to do so.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
