Good evening StockBandits!
The indexes had a shot at rolling over today, but shook off some early selling and rallied back to finish only fractionally lower on the day. The pullbacks of the past few days have been very shallow, which truly just equates to a rest. Following the recent ramp from the February low, any and all rest is good, so each passing day of relative non-movement is a positive development.
For example, the S&P 500 has not had a larger net change in the past 4 sessions than 3.2 points. 3 of the last 4 net changes have been smaller than 1.1 points, so to see prices stagnate for once is really starting to benefit some charts out there. Flags and pennants are building, and I would expect more to surface in the next few days if we see any additional rest.
I mentioned last night that long-sided entries just carried less appeal given the recent ramp in prices, and that I would stay selective. Tonight, I’m not changing that tune, but there are a few new setups which interest me and they happen to be on the long side. With all my trades, they will need to trade through the prices listed in order to trigger an entry for me, which will require them to get back in motion. Stated otherwise, if there is no strength going forward, there will be no new buys. However, given the market’s opportunities to pull back in recent days and the buoyant price action we’re still seeing, it may simply be a matter of time before the bulls look to extend their short-term edge.
Let’s get to the charts.
NAZ – The NAZ is off its recent high of 4378 but is still showing a reluctance to fill the gap to 4277. Today it had another chance to weaken further and was able to finish well off the session low. Dip-buyers are still present.
SP500 – The S&P is building a bull flag here after several days of lateral price action and limited movement. This is the next-best thing to a pullback, so all eyes are on 1883 for another potential breakout.
RUT – The RUT just painted 4 red bars but there was such limited downside that it hasn’t raised any concerns. The high of 1212 remains the upside level to watch, interestingly that’s also 12% off the February low.
DJIA – The DJIA continues to hold up well despite being the only index among the majors not to have cleared its Dec high. It’s 170 points away, which could be done in a day. However, it seems to be attempting to rest here so we’ll see if any buying brings it closer to resistance ahead of a breakout attempt.
Notable Names:
CSCO is not the NASDAQ heavyweight it used to be, but it is still one to watch. Here it’s at the lower end of the trading range, needing to hold $21.40 to avoid a breakdown.
AKAM is starting to deteriorate here with a rounded top appearance and a short-term lower low. There is still several points of room before the unfilled gap would be threatened, making this one to keep on the radar for momentum players.
LO just ramped and then saw a partial pullback. Price has stabilized and now looks like it could turn back up. I’m not expecting it to regain the same momentum it exhibited last week, but a push through $53.25 looks worth a single-day play for me on the long side.
RAX is at rising support and threatening to break it after today’s 3% decline. A swing stop would be a bit too wide for my taste, so I’ll instead opt for a single-day play on the short side if price undercuts $36.80.
RIG is at multi-week support and a breakdown at $41.10 would likely trigger some sell stops. I like it for a single-day play on the short side if that occurs on Tuesday just to participate in the initial breakdown.
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.
CERN is sitting in a large bull pennant here and could easily regain strength if it resolves to the upside. I’ll get long for a swing trade if price clears the upper trend line at $61.50 with a protective stop just beneath the base.
SYNA has reached the apex of this symmetrical triangle so I’m watching for an upside breakout to get long for a swing at $65.20. If so, I’ll also have a protective stop beneath the base and will be looking for an eventual move equal to the height of this triangle.
CNQ has been coiling beneath resistance and in recent days has created short-term higher lows to show some quiet accumulation taking place. I’ll get long for a swing if price makes a new high at $37.75, and will have a protective stop just beneath rising support in case of a downside reversal.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
