Good evening StockBandits!
The eerily quiet trading continued today with another narrow-range session as the major indexes painted minimal net changes on slightly improved but below-average volume. The tendency was to magnify the importance of the intraday moves, although momentum was distinctly absent and the price action remained choppy. On days like today and Monday, it’s usually best to zoom out on the chart and recognize that key levels are simply not being crossed yet.
What’s so interesting here is that the market could soon see another emotional move. We’re churning near highs in the case of the DJIA and S&P, while the RUT and NAZ have carved out some short-term lower highs. Depending upon which side takes the baton and runs with it, the other side will likely follow. That sets up a potentially sharp advance to the upside with a breakout scenario, whereas a rollover move in techs and small-caps could trigger some profit-taking as those with longer timeframes move swiftly to lock in gains accrued over the course of the year. For now, however, the waiting game continues and all we can do is stay objective until a catalyst comes along.
Last night I noted that the lateral basing action was helping to construct some bigger-picture bases, and today’s session was equally beneficial in that regard. However, there is a blend of setups out there on both the bullish and bearish sides which could offer some opportunity here, whether the trading range persists or we finally pick a direction and see a thrust. Tonight there are a few more swings I’m adding to the list in case they prove capable of clearing their trigger prices. I continue to think that patience is important here, so I’m doing my best to stay selective while waiting for conditions to warrant a stronger directional bias.
**Please note that I’ll be on vacation starting tomorrow 11/13 and returning on Wednesday, 11/20. This will be my 3rd week of vacation for 2013, and with the market currently consolidating it may prove to be an ideal time to step away for a few days. I’ll check email on a limited basis, so if you have questions or need help with something, feel free to let me know. Otherwise, I’d encourage you to continue doing your own research during this time and stick with a defined plan for each trade you put on.
I’ll be setting up the swings but will not be trading the other stocks listed this evening on Wednesday as I’ll be traveling for much of the day to Disney World. I’ve listed technical spots of interest for them and believe these are the best setups in the market right now. For additional ideas in the next few days, please refer to the Bullish/Bearish watchlist links included near the bottom of the report.
Let’s get to the charts.
NAZ – The NAZ is glued to 3919 right now and hasn’t been able yet to build on Friday’s bounce. It’s maintaining this channel for now with some room to move in either direction before a meaningful break to the upside or downside would occur. While it’s certainly easy to read too much into a stagnant market like this one the last couple of days, I don’t think the bulls are ignoring the lack of follow through. We’ll see if they can get in gear soon, and if they do not, then the stage is set here for another lower high in the short-term (with the 11/6 bounce high at 3955 being the first lower high vs. 3966).
SP500 – The S&P continues to churn beneath 1775, and with each passing day that level gets validated more and more. That could result in a decisive move through it if crossed, or away from it if profit-taking kicks in. Either way, it’s clearly a level where a pretty good battle is taking place.
RUT – The RUT peaked at 1123 and then saw a lower short-term high on the bounce to 1109 on 11/6. The stagnation of the last couple of sessions could carve out another lower high if prices turn south from here, which is one scenario to watch. Another is that this index finally sees some follow through strength to Friday’s bounce and heads higher within its range.
DJIA – The DJIA keeps coiling here beneath 15800 but remains a day’s move away from 15600. We’ve seen incremental new highs in this index prove to be turning points in recent months, but as of yet this one hasn’t seen that fate. The jury’s still out though, so until we push through short-term resistance it’s definitely something to keep in mind.
Notable Names:
TRIP looks good for a quick trade above the trend line with room to rally back toward the recent high. I won’t be trading it Wednesday but it’s a setup to keep on the radar over the next few days.
MPEL has moved back up toward short-term resistance and a push through it could send price quickly back toward the recent high. I won’t be trading it Wednesday but it’s a setup to keep on the radar over the next few days.
P is perking up here and could break out as soon as Wednesday. This ascending triangle pattern could produce a quick rally, although earnings are due out Nov. 21 according to Yahoo! Finance. I won’t be trading it Wednesday but it could certainly produce a tradable move for the intraday trader.
GRPN is trying to get some traction here as it faces a descending trend line. A push through it could spark some short-term momentum, although this one hasn’t had a history of lasting moves in recent weeks. I won’t be trading it Wednesday but it’s a setup worth watching the next few days.
WLL is starting to stall out here and roll over after a 2-day bounce from support. A break below the rising trend line could bring a quick retreat back to $61 support. I won’t be trading it Wednesday but there’s some short-term potential here for the nimble trader.
ALNY is another stock hugging short-term rising support after having entered a correction early in October. This is a biotech stock and therefore one to be cautious of when considering overnight trades, but as a single-day momentum stock it’s worth keeping on the radar. I won’t be trading it Wednesday but wanted to share it here as a setup of interest.
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.
NSC is a swing trade I’m setting up on the long side upon a break through $86.90 where the short-term trend line stands. I’ll have a protective sell stop beneath the pullback low in case of a reversal. Otherwise, this stock is in an uptrend and in a strong sector and has plenty of room to see a rally if the next leg higher begins.
SODA has been on my radar in recent days with rising support and with each validation of that trend line this setup has looked better and better. I like it now for a swing on the short side should it break $55.60 with room to work back toward the November low, followed by a possible test of support from late spring as targets. I’ll have a protective buy stop above the bounce high just in case.
GIMO is another swing candidate for me here as I’ll want to get short upon a downside break of $28 at the lower channel trend line. This bounce looks to be stalling out, but a turn downward would confirm it. I’ll only be setting a single target for this trade as it’s a new issue and I’m only looking for a test of June support. I’ll have a protective buy stop above the bounce high in case of a reversal back up.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
