Good evening StockBandits!
The indexes couldn’t get far from the flat line today with some zig-zagging price action throughout the session. The DJIA slid a bit and the NAZ gained a bit while the others simply churned their way to net changes of less than 1 point from last night’s closes. The FOMC minutes failed to produce a meaningful move, and as of tonight we remain range-bound with the same key levels on the radar for Thursday.
Big movers from last night’s report included ISIS (6.7% past trigger), HALO (4.4% past trigger), both of which were well worth playing. ZLC also offered a nice second-chance move of 3.3%. These single-day setups are producing some nice cash-flow, while at the same time requiring no overnight risk.
There have been some abrupt reversals in stocks like OPEN after a nice 1-day move yesterday, which is another reason I’m being so selective with swings in this environment. The broad market is short-term range-bound, which means by definition that follow through is simply harder to come by. It’s a stick-and-move environment right now, so that’s how I’m playing it with most issues. As more swing setups come available which have high quality bases and attractive risk/reward profiles, I’ll of course add them. In the meantime, I won’t be forcing new entries. Good setups will come along, but if I lose patience or my objectivity before they do and lower my standards with sloppier setups, then I won’t be able to position myself to participate in the best.
If you have a couple of tickers you’d like added to the Charts on Demand video for Thursday, send them my way. Just hit reply to this email with those tickers included and it will get to me.
Let’s get to the charts.
NAZ – The NAZ finished the day just 12 points from the Dec 31 high of 4177 tonight after a modest 12pt lift. Intraday, it got within 6 points of that level, but without the participation of the other indexes it just didn’t have the necessary thrust to produce a breakout. It’s now at the top of the short-term range, which could make Thursday a bit of a pivotal day.
SP500 – The S&P saw a pickup in volume today but on a net basis it went nowhere with an inside day and a net change of less than half a point. An upside breakot would occur beyond 1849, which isn’t far away, but as of now price isn’t pressuring resistance to suggest it’s on the verge of punching through.
RUT – The RUT seems to have found its comfort zone around 1157 with another close there tonight right in the center of its 20pt trading range (1147 – 1167). This quiet basing action is actually healthy, it just makes it easier to overtrade as each new bar intraday looks like the start of something meaningful but finds no follow through. At some point we will get that follow through and exit this range, but for now it’s still intact.
DJIA – The DJIA neared the highs yesterday but wasn’t ready to break out today, instead falling back within the high-level trading range it has carved out since Christmas. 16400 has been short-term support and the high is at 16588, giving us a pair of levels to watch.
Notable Names:
SNDK shot higher today without me. I have shown this chart a couple of times lately but had been waiting for price to pressure resistance near $71 and then set up a play of some sort. Today it blew right through that level to break out and looks poised for higher prices, but it’ll do so without me. Sometimes you just miss trades, so you have to move on to the next.
USO is quickly coming into key support but that alone isn’t reason to become bullish for this stock or any other. Waiting for support to prove itself is a better plan, which means there’s no rush to buy even if this area ends up holding. Getting long should be done in anticipation of higher prices, and the first order of business here will be to stabilize first and then exhibit some bullish characteristics.
DDD is still running and could pop again. I’m not looking to trade it but wanted to share the chart nonetheless for the example. As a move like this shows acceleration, the bases tend to get smaller and the warranted timeframe for a new trade becomes shorter and shorter. Keep it quick in setups like this.
DHI is trying to firm up after a short-term dip and I like it for a single-day play if it can clear $21.85. The prior high was $22.40, which could get tested on the initial pop.
FIVE has been stabilizing since a quick correction off the November high and now price is pressuring a recent level. A push through $45.30 could produce a pop in this stock as buying interest returns, so I’ll take it for a single-day play if it can clear that level.
VJET is a fast mover but looks good here for a rip higher if it can exit this small falling wedge with a push through $45. A swing stop would be too wide, so I’ll instead just look to participate in the initial turn higher as a single-day play.
OII was listed here last night but did not trigger and still looks good. I’m eyeing the same setup, which is a single-day breakdown play if a new low is made at $75.45 to participate in the initial breakdown move. I’d like to see the descending triangle pattern tighten before considering it for a swing as that would naturally reduce risk via a tighter technical stop above the base.
New Swing Trade Candidates:
No new swing candidates tonight, just not a lot of setups out there and the frequent reversals we’re seeing within this market range has lowered my interest in multi-day plays until we finally see an exit. I’ll stick with existing exposure heading into tomorrow.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
