Good evening StockBandits!
It was a pretty uneventful session today with a soft open which was quickly bought, an intraday uptrend for much of the session, and then a bit of backing off late in the day. Ultimately, we saw the market finish slightly higher than where it opened, but down incrementally from last night’s close. The NAZ and S&P 500 essentially saw inside days as the boundaries from Tuesday were tested but held.
We remain in an environment where the more speculative names (and indexes) are holding up better than the blue-chip types of names (and indexes). For the indexes, that equates to a stronger NAZ and RUT vs. a weaker S&P 500 and DJIA. The latter pair has registered declines in 8 of the last 10 sessions, whereas the former pair has seen some declines but sit right near the highs. Rotation just isn’t happening, and the headlines aren’t really spooking the speculative money. The 4th quarter is underway, and that breeds performance anxiety. When a stock or an index can’t sell off, confidence quickly grows and more cash gets put to work.
There are a ton of economic, political, or macro events which could shift the tide, but for now the NAZ and RUT both remain the leaders and they’ve even based in a healthy fashion for the last couple of weeks. Tuesday’s breakouts haven’t produced follow through yet, but neither have they failed (despite an opportunity to do so today). Still, the lack of participation by the senior indexes will likely need to change if the hot money is going to gather upside momentum. That said, the senior indexes have certainly endured pullbacks here which makes them a bit more ripe for a rebound. Let’s see if the bulls can seize the opportunity.
By the way, if there are a couple of stocks you’d like me to include in the weekly video for Thursday, hit reply to this email and include them.
Let’s get to the charts.
NAZ – The NAZ incrementally cleared Tuesday’s high but for the most part stayed within the range from yesterday, unable to gather any steam in either direction. It finished lower by less than 3 points, which really is just a day of rest. The breakout has happened and it has held, so there’s room for further upside if the bulls want it.
SP500 – The S&P challenged the lows from yesterday but ultimately gave up just a single point in today’s session, going out at the high of the day much like yesterday. This index has lifted nicely from Monday’s low when 1671 support was neared, but still has room to lift after this 2-week pullback.
RUT – The RUT also held its breakout today despite giving up a few points with an inside day. A measured move out of the short-term trading range would project roughly 20 points to the 1102 area, so let’s see if the bulls want it.
DJIA – The DJIA can’t seem to get out of its own way and posted its 8th decline in 10 sessions today. However, it incrementally broke the low from Monday and then saw a lift of nearly 90 points from there. That’s not a lot, but it’s a start. I’m watching this descending channel for a possible upside break around 15200 to set a relief bounce in motion.
Notable Names:
SFM is a new issue but has shown plenty of strength in recent weeks. A new high at $46.50 looks great for a single-day play, and there’s enough liquidity here for an intraday timeframe. This base is just a bit wide and sloppy so a swing isn’t attractive to me here.
NUS is near highs and has a recent history of making one-day moves through lateral resistance levels. That’s all I’m looking for here again if it can clear $100 for a momentum play.
RAX is still working on this base and today validated upper resistance. A breakout at $54.25 looks great for a single-day play on the long side, although a bit tighter base would allow for a tighter stop so I’m holding off on a swing here for now.
SBUX is near highs and could break out again any day now. This looks good for a breakout play above $78, although I won’t be taking it overnight as I’m only interested in participating in the initial move through resistance.
CAB is working lower and tonight is sitting on short-term support. A break below $62 could bring a quick retreat toward $60 where the unfilled gap begins from late April on the far left side of the chart. I like it for a single-day play on the short side if it does undercut $62.
SEE is looking heavy here and a move below the small rising line of support at $26.90 could trigger more selling. I like it for a single-day play as the last couple of moves in this stock only lasted 1-2 days.
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.
DHI is shaping up here for a turn higher and today price may have started to turn back up. I’d like to see the trend line cleared to the upside at $19.75, but if so I’ll be a buyer for a swing trade. I’ll have a protective stop below the short-term low and will be looking for a move back up toward the recent high as a first target, followed by a test of July resistance as a slightly more aggressive second target.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
