Good evening StockBandits!
What kind of day was it in the market today? It depends on whether you’re looking at techs and small-caps, or if instead you’re looking at the blue chips. The former groups reached new highs today as they pushed a little further beyond their recently cleared resistance zones, while the latter stayed beneath resistance for yet another day. This sort of split decision has been the norm of late, but sooner or later we’re going to see the averages start moving in tandem again – and it’ll produce much better moves.
We have an FOMC meeting next week which could certainly get things moving more in unison, but between now and then it’ll be the usual econ numbers and earnings reports which have the potential to shake things up. The intermediate-term uptrends are still very much intact, it’s just a matter of the senior indexes being in rest mode while the more speculative names are back on the move.
One thing I wanted to mention tonight was the play in ISIS, listed here last night. Today the stock gapped beyond the intended trigger price by $0.90, or less than 2%. As per my gap rules, that warranted a reduced position size. With swing trades, I’m still willing to enter after a gap beyond my intended entry price, so long as it’s within reason. That’s because I’m looking for a larger move, I just want to scale back as the distance to the initial stop becomes wider under those gap conditions. With single-day plays (such as IBKR listed here last night), I do not chase the gaps at all as I want to only take those trades if price moves through the levels specified during the trading session (not overnight).
By the way, hit reply with any tickers you’d like to see covered in tomorrow’s Charts on Demand video.
Let’s get to the charts.
NAZ – The NAZ eased into new multi-year highs again today, putting a bit more space between current prices and former resistance of 4177. It’s now approaching the measured move target of 4250, derived from the height of the recent range added to the breakout zone. That doesn’t have to be a stopping point, simply a projection based on the last pattern.
SP500 – The S&P remained stuck in the mud today with a 1pt advance which kept it beneath 1850 resistance. This index could get going any day, but as of yet it’s still waiting for a catalyst to either punch through the highs or roll over away from them.
RUT – The RUT made another new all-time high today as it pushed to 1182, just 5 points from the measured move target of 1187 coming off the 1167 breakout from the 20pt trading range. Here again, that doesn’t have to be a ceiling, but so far the price action has been pretty textbook with a breakout above 1167, a few tests from the top side, and then some upside continuation in the last 2 sessions.
DJIA – The DJIA is still the laggard and today was the only index to post a decline. It wasn’t much, but it did give up 16400, leaving 16240 (prior dip low) and 16174 (November resistance) as next levels to watch on the downside.
Notable Names:
SFUN was listed here last night for a single-day play if it could clear $89.30, which it did soon after the opening bell. The stock ran over $6 from there, giving another excellent single-day opportunity to add to the many we’ve had of late. These cash-flow types of trades continue to present themselves, which is nice given the reduced number of swing setups we’ve been seeing recently.
TMUS is on my radar here but I’m not setting up a play yet. I like how price is consolidating the big December rally, but would like to see price edge a bit higher and start to challenge resistance before setting up a breakout play.
GTLS is also on my radar as this descending triangle pattern gets closer to maturing. Lateral support is $85, which if broken could produce a swift move down to the mid-to-low $70’s. I’d like to see the pattern tighten a little more to create a closer stop, thereby improving the risk/reward of the setup.
GMCR is looking ready to pop again and has room to run right back to the $84 area where it broke down in September. This looks best for a single-day play on the long side if it can clear $81.60.
PCRX has stagnated in recent days to allow this bull pennant to tighten, and it’s about ready to pick a direction. Given the existing uptrend, I like this one for a single-day play on the long side if it can clear $66.50 to participate in the initial turn higher. Upside volume has been rather quiet and price isn’t edging higher, so with this one being another drug stock I’d prefer to go with the initial move rather than stick around for a multi-day swing.
TWTR is resting just above rising support here and a break below $61.20 looks good for a play on the short side. This one has shown some indecision lately with a break above a downtrend line but no additional progress, so I’ll opt for a single-day play here as well.
AMBA was highlighted here last night but did not trigger an entry today. Price still looks to have carved out a lower high, so a downside break of rising support at $31.30 will be my pivot for a single-day play on the short side. Price would need to stay between the converging trend lines a bit longer before I’d consider it for a swing, as that would help to provide a nearer natural buy stop (above the bounce high).
New Swing Trade Candidates:
No new swing candidates tonight, still waiting for some patterns to tighten to create some better risk/reward scenarios.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
