Good evening StockBandits!
The S&P rallied right to resistance this morning to kick off the holiday-shortened week on a positive note. The strength was short-lived, however, as stocks rolled over hard for the next 2 hours. We did see a decent recovery from the mid-day low, but the best levels of the day were reached in the opening minutes and never again tested. The RUT did set a new all-time high and the NAZ was able to close at a new multi-year high. The bulls continue to have the edge, but they’re still waiting for better unity among the averages.
The disconnect in the indexes continued today with the DJIA and S&P each lagging and unable to break out like the NAZ and RUT. Although the latter pair hasn’t made great headway since clearing resistance, the fact remains that they have at least cleared their respective technical hurdles, giving them the chance to pick up some steam. The senior indexes have been hesitant to run, struggling to show upside follow through to any degree. That may need to change if we’re going to see this market make more headway on the upside.
For tomorrow, I’m again sticking mainly with single-day setups aside from 1 new swing candidate. Earnings season is getting underway and that places some significant limitations for me on what I’m willing to trade simply due to the abbreviated window of time in which I’ll stay with a position before closing it ahead of the earnings announcement. Additionally, the mixed signals from the averages leaves me more interested in grabbing the initial moves rather than initiating lots of positions expecting follow through. That will likely come in due time, but for now I’m staying light on my feet.
Let’s get to the charts.
NAZ – The NAZ was able to paint a new multi-year high today with a solid advance. It’s holding above the small gap to 4183, which is the first downside level to watch in case of a pullback.
SP500 – The S&P has on 3 occasions tagged the same resistance area (1849-1850) and failed to get over the hump. It was able to advance today to end a 2-day pullback, but each validation of resistance will build frustration until we either roll over hard or finally punch through and make some real progress. Until then, expect limited follow through.
RUT – The RUT has validated 1167 from above in the past 3 sessions, including today as it pushed to a new all-time high. Having left the 20-pt trading range, the measured move extends up to 1187 as the next target.
DJIA – The DJIA just can’t seem to get going and is glued to the 16400 area. We saw a brief break of it last week but it was quickly reclaimed and that’s where it remains. 16588 is the high to watch, although that hasn’t been tested in 2014.
Notable Names:
PBR is coming into a major level of support here near $12. It rallied all the way to $18 after hitting that zone last July, but it’s important to let price stabilize here since it’s currently caught in a downtrend.
TSLA rallied all the way up to fill the early November gap today then finished the day $0.13 below it. Price hasn’t exactly backed off yet, but this would be a logical rest spot after a massive spike higher over the past 5 sessions.
FB is facing a breakout here and a new high at $59.05 would interest me for a single-day play on the long side. That would allow me to participate in the initial breakout move, but earnings are scheduled next week and this base could stand to tighten so I won’t be keeping it overnight.
SFUN is stair-stepping and could pop again here. The past 3 breaks above trend lines have resulted only in 1-2 day advances before considerable rest sets in, so that’s all I’m looking for here. I like it for a single-day play if it can clear $89.30.
AMBA is looking a little stalled-out on this relief rally, and may carve out a lower high. I like this setup for a single-day play on the short side if it breaks $31.30 rising support, but would prefer to see this pattern tighten before considering it for a swing.
APA was listed here last night but didn’t trigger. The same setup is still in effect, so I again like it for a single-day play on the short side if it makes a new correction low at $83.60 and begins to fill the gap from August.
IBKR is looking heavy here as it tests support after recently failing at resistance and rolling over. I like it for a single-day play on the short side if it breaks $22.40 to resume the retracement of the fall rally.
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.
ISIS is sitting in a tight bull pennant here after some very nice recent momentum. I’ll be a buyer for a swing trade if it can clear $48.10 to start a new leg up. The last run was nearly $11, but I’m not looking for that large of a move. I’ll take a smaller position and will be looking for an eventual move of about half that, staying conservative given the sector this stock is in (biotech) and will have a protective stop beneath multi-day support. If it can break out in a strong fashion, I’ll look to aggressively tighten my stop in the next day or two.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
