Good evening StockBandits!
Small caps continued to lead today by nudging past the 883 short-term highs after testing the downside briefly this morning. To see the bulls again step in on even minor weakness in the more speculative names points to a healthy appetite for risk. Meanwhile, the S&P 500 edged higher again without breaking out, which seems quite difficult to do given the incredibly close proximity to 1474. Perhaps we see a new 52-week high made in the next couple of sessions, which should also give us a bit of a gauge for how intent the bulls are to press their short-term edge.
Technically, the market averages remain very healthy. We’ve ramped higher since the final trading day of December and into the first couple of sessions of 2013, and since then we’ve seen some quiet churning action. That’s a great way to digest a big move, rather than seeing a quick reversal or the erosion of gains take place right away. At this stage, there’s a bit of a mixed market with the NAZ being weighed down by the weakness in AAPL, but aside from that there is some widespread bullish price action which could certainly lead to even higher prices.
My aim is to continue to let the charts guide my decisions. My watchlists remain heavily lopsided from bullish to bearish, and many stocks have done a nice job of building new bases and putting in rest when needed. That can help trends persist. It’s important to note, however, that the market is always subject to change, making it of utmost importance to continue to keep one eye on risk should things happen to become less stable.
(Remember, it’s the start of earnings season, which means a watchful eye on the earnings calendars must be kept! I use EarningsWhispers and Yahoo! Finance primarily, in order to avoid any big surprises. They’re great sites to bookmark as quarterly reports start rolling in.)
Let’s get to the charts.
NAZ – The NAZ is still caught in the range from last week, but is holding above the New Year gap. A move up through 3127 brings the highs into the picture, whereas a break below 3076 would begin to fill the gap.
SP500 – The S&P keeps dancing around 1474 but has yet to clear it. This basing action is beneficial and may lead to a more explosive breakout if and when it occurs, but the bulls still have to produce it.
RUT – The RUT made new highs by a point today, but what was more impressive was the intraday rebound from early weakness to finish at the highs. This remains the leading index both in its price action and the fact it’s at highs.
DJIA – The DJIA keeps working up and now could be facing a breakout any day through 13661.
Notable Names:
LULU is not in a tradable position tonight as it lacks a pattern, but today marked another example of a stock respecting a key level. For this one, it’s $66, which it again tested today and then rebounded by more than $3. It’s helpful to not only identify key levels on charts but to keep your trend lines current, you never know when they might present an opportunity.
AEO has some work to do to shift the trend but after carving out a short-term higher low, it now has a shot at turning back up. Today’s bar was strong even though volume dipped slightly (it remained above-average), but a solid push through the downtrend line which began in September would indicate this most recent dip could stick for a while.
HLF is a good example of why it’s imperative to defer to the price action. We’ve all heard that the market is bigger than we are, and this chart is a perfect reminder. Once support was broken, momentum took the southbound train and steamrolled anyone trying to buy it. Once it stabilized, it’s been a one-way street of green, hammering anyone trying to short it. Respect the price action and when it shifts, get out of the way!
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.
CLR is in a very clean bull flag pattern here with ample room to move higher. The short-term hurdle is $82.40, and a push through that level invites more technical buying.
FSLR has based for a few weeks and now price is getting wedged. A turn up through the descending trend line at $32.10 brings the highs back into the picture with room to go even farther. I particularly like the presence of the rising support trend line, as a break of it would spell trouble and therefore serve as a loss-cut zone.
SSYS has paused temporarily within its uptrend with this wedge pattern. A turn up through $85.10 puts this one back on the move with well-defined short-term support just a short distance below to serve as a technical stop.
WCG is in a longer-term downtrend although it has been moving laterally for a number of weeks. Even within this low-level trading range, however, all bounces since December have resulted in lower highs and each has been sold. A breakdown through $45 sets up a shorting opportunity as this one again comes under pressure.
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Do the candidates from last posting stay on the list, if they did not trigger today? Or is there a table of swing trades like was here that I have somehow missed?
Thanks…Jon
Yes Jon they are still valid, so for example from Monday evening ADSK & APC still look good but haven’t yet triggered.
Jeff