Good evening StockBandits!
The NAZ and RUT each approached their prior bounce highs after 6-day win streaks, but it was a close but no cigar attempt as they each got turned away from their respective resistance zones today. The S&P 500 and DJIA each finished red as well, although they painted inside days with no downside conviction.
The V-moves off last week’s lows have been impressive and certainly became extended coming into today, so a rest and/or some profit-taking would be both healthy and welcomed at this stage by traders. The big tells will be if we see any downside follow through, how intense that selling gets, and how heavy the volume becomes if a slide from here should arrive.
Two factors which are likely to impact trading tomorrow at least in the early going are the positive responses to FB and AAPL. Both are trading higher in after-hours action, with AAPL ramping after the beat plus a 7-for-1 split announcement. Although a split is akin to slicing that apple 7 ways, the impact for such an expensive stock like AAPL is that it broadens the prospective investor base who view a $80 stock as more affordable. It gave the futures a big shot in the arm in the evening session.
One has to think that the bulls are breathing a sigh of relief tonight, knowing that today’s downside could have been nastier than it was. But it will be critical for them to maintain bids beneath the market to prevent a deep retreat, and to press any upside in the short term to break the streak of lower highs that we still have on the daily charts of the NAZ and RUT. A gap higher tomorrow which gets met with supply sets the stage for a deeper pullback, so we’ll need to evaluate how a strong open gets treated as the session progresses.
I’ve noted lately just how hard it is to participate heavily at the moment because about the only charts we have to eye are lower-high situations which have yet to confirm. Those are the plays at the top of my radar tonight, as I’m still uninterested in chasing strength after so much nonstop upside. Even some lateral movement would do wonders for creating new flags, pennants, and bases from which trades can be made.
Be sure to send me any tickers you’d like to see covered in tomorrow’s Charts on Demand video, you can comment beneath this post here on the site or reply to the emailed report and I’ll put them on the list.
Let’s get to the charts.
NAZ – The NAZ turned lower today, shying away from the 4185 resistance level it had approached. Today’s decline might be undone, however, as soon as tomorrow morning if the strength in the futures we’re seeing tonight is able to hold. That leaves 4185 as the upside level to watch, whereas the unfilled minor gap to 4121 is the next downside number to keep an eye on. This index remains extended even after today’s decline and could stand to rest further.
SP500 – The S&P only backed off a little bit today, painting an inside day as it respected Tuesday’s range. The 1883 level still isn’t far away, but any push north of that level will need to hold. Otherwise, the risk of another breakout failure becomes the focal point, just as it did a few weeks ago.
RUT – The RUT dipped by 8 points today, only giving back a portion of Tuesday’s gains. That leaves this index stretched in spite of a little red today. The 1160 level on the upside is the first number to watch, although the bulls would benefit from a rest or even a pullback before an attempt is made to clear that hurdle.
Notable Names:
VTR is trying to stabilize here after a short-term pullback from the high. A turn up through the small descending trend line at $64.80 looks good to me for a single-day play on the long side, as this stock is nowhere near extended. There is some technical overhead at the April high and about $1 beyond it from late last year, so I’m only looking to participate in the initial turn higher here if it happens rather than holding for a swing.
PKG has some lower highs in place already and the current bounce looks primed for a failure here. A break below this rising wedge at $66.95 could invite more short-term selling, so I like this setup for a single-day play on the short side with room down to the April low for a test.
EXPE is resting on the lower trend line of a rising wedge here after having already carved out lower highs since it topped in Feb. A break of the trend line at $71.70 looks good to me for a single-day play on the short side. Earnings are due out next week so I’m not content to take it for a swing with such a limited window of time to make a meaningful move.
YPF is starting to look a little heavy with a gradual rounded top beginning to emerge on the daily chart. Some downside continuation at $29.15 would make a multi-day low and pave the way for some selling. I like it for a single-day play on the short side if it undercuts that level.
GES was highlighted here last night but has not yet triggered. The same setup is still intact, so I’ll again be looking to grab it for a single-day breakdown play if it makes a new low at $26.60.
New Swing Trade Candidates:
No new swing trades tonight, waiting for new candidates to emerge. I’m eager to get more capital at work across timeframes, but am staying patient with so few setups right now to choose from and the heart of earnings season. As they arrive, I’ll certainly share them here.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
