Good evening StockBandits!
I used to have a roommate in college who, when he was doing what he needed to do, would say he was “TCOB” or “takin’ care of business.” It wasn’t that he was doing anything over and above what was required of him as a student, but simply that he was doing his part to get by – no more, and no less. That is a pretty good description of the bulls right now.
They produced a solid lift last week on light pre-holiday volume, but they’ve backed it up so far this week with some follow through. They’re Taking Care of Business pretty well. With hesitant breakouts and a bit of a split decision between the blue chips and the smaller-caps, there wasn’t a great amount of hope for continued upside. Given the time of year it is, the poor volume, an extremely low VIX (lack of fear), and the lack of unity among the major indexes, it certainly seemed possible that stocks could back off and shake things up a bit. Instead, the buyers have simply shown up.
Just take today, for example. Stocks didn’t advance, but neither were they allowed to slide. The low was set early in the session, but there was a resting bid beneath prices which kept things afloat. Essentially, it equated to a day of rest, which is a healthy way to pass the time after the lifts we’ve seen in the last 2 weeks. The bulls can’t rest on their laurels, or else they risk some failed breakouts. However, they are in better shape than they were two weeks ago.
I am a little bit surprised by how limited my bullish and bearish watchlists are (links down below) after working through the charts tonight. There are a few setups, but it still doesn’t look like there’s an opportunity to just pile in on one side here. Although I’d much prefer to have a few new swings and some single-day plays setting up, the fact is that the patterns still need work before becoming multi-day candidates.
Let’s get to the charts.
NAZ – The NAZ closed right at resistance last Friday, gapped and ran Tuesday, then rested today. Volume is still running somewhat light, but a trading range breakout has finally arrived and that gives the bulls some room to press their edge.
SP500 – The S&P finally paused today after a 4-day run (and 6 out of 7) which took it to a new all-time high. The big level this index needs to hold above is 1883, which gives it roughly 26 points worth of breathing room for now.
RUT – The RUT edged past 1137 yesterday but has pulled back to test it here. There is a small unfilled gap to 1126 which should be watched on any further weakness, but the bulls will now want to see any dip result in a higher low.
DJIA – The DJIA painted an inside day today with a minor pullback on light volume. It is still above 16588, although not by much. The all-time high is also within reach if the bulls want it.
Notable Names:
BBY has been working quietly higher since February and may soon attempt to challenge the unfilled gap from January. I’m keeping it on my radar here as it churns beneath multi-month resistance.
TSL is resting after a big pop last week and may soon get back on the move. I’d like to see price get a bit closer to short-term resistance before setting up a trade, but there’s certainly some room for it to run if it can make a new recovery high and regain a little momentum.
DVN is at resistance here and a breakout to a new high could spark a quick spike higher. I like it for a single-day play on the long side if price can clear $73.90 to make a new high.
CREE is at multi-day resistance here and a push through it could allow the recovery attempt to continue. I like this one on a push through $49.20 for a single-day trade on the long side.
LNG is still shaping up here and may finally be nearing a breakout. The base is still too wide to justify a swing trade, but it does look good to me for a single-day play on the long side if price can make a new high at $59.55.
FSLR just bounced for 5 straight sessions but overall remains in a correction. I like this one for a single-day play on the short side if price breaks rising support at $61.40.
UBNT is another stock which is hugging rising short-term support. This stock can really move, so I’m only interested in a single-day play here on the short side for Thursday if price breaks $33.85.
New Swing Trade Candidates:
No new swing candidates tonight, still waiting for patterns to develop further with better risk/reward profiles.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
