Good evening StockBandits!
It’s great to be back from a week of vacation, and I hope you’ve fared well in my absence. We had some good times at Disney but there’s no place like home!
Three of the four averages I watch daily hit new highs on Monday, but each have since pulled back. The RUT failed to break out, while the NAZ was able to break out only to quickly fail and get back beneath resistance. In addition, the RUT had led the way throughout the rally, but in recent weeks has failed to achieve a new high like the others. To see the speculative small-caps lose momentum and the NAZ fail a breakout are perhaps signals we should take note of. That’s not to say the rest of the market just rolls right over and plays dead, but possibly some subtle hints we might not want to overlook.
Of particular note right now to me is that afternoon weakness has become the new routine. We have stumbled across the finish line in each of the last 3 sessions, which brings some doubts as to the resolve of the bulls at this stage in the rally. If “amateurs open the market and professionals close it,” then the pro’s seem to be raising some cash over the past few sessions. I’ll be paying attention tomorrow to see if the same scenario unfolds.
Given that this week I’ve been out, and the fact I’ve got a world-class cold and sore throat, I’m going to just put out a standard Blueprint report this week in lieu of the Thursday chart show. Next week is Thanksgiving so we’ll return to the Charts on Demand Thursday format the following week.
Let’s get to the charts.
NAZ – The NAZ pushed through 3966 but fell back below it earlier this week, constituting a breakout failure for now. This leaves it range-bound above 3855 near-term support but well shy of the high at 3994.
SP500 – The S&P is in the process of testing its breakout as of today’s pullback, and tonight it sits just a short distance above 1775. The uptrend remains intact, but weak finishes in each of the last 3 sessions leaves this index looking a bit tired.
RUT – The RUT failed to clear the prior high after getting within a few points of it on Monday, which now leaves it with a short-term lower high. There’s still 20 points of downside before next support would be found, so lateral is the trend classification for this index until it can find some lasting momentum in either direction.
DJIA – The DJIA pulled back a bit today but still stayed within its uptrend channel. This index has been in slow-grind mode to the upside so it remains in good technical shape as of tonight.
Notable Names:
AAPL is continually testing the $514 level from above over the past few weeks since it cleared it. That not only offers a level to watch for this tech leader, but another short-term tell for the NAZ if that level is broken.
DDD is an excellent example of what happens after a parabolic run. The recent run has been quite impressive, but once the music stops everyone rushes for a seat and it’s never pretty. The 2-day selloff here has been quick and nasty, suggesting it’s going to need some time to base. Stops are a necessity, especially when trading momentum.
VJET is another stock that went parabolic in the same industry (3D printing) but has just sold off 42% in the last 2 sessions. This is yet another case for the 2-way nature of momentum and the need for maintaining stops just in case of a nasty character change. Those caught in this downdraft without a stop now face the decision of holding in hopes of a rebound, while facing the risk of a continued selloff, neither of which are a good place to be.
MAN is just now undercutting its uptrend line as of today. This doesn’t mean an end to the uptrend itself (higher highs, higher lows), but rather a change in the pace of the uptrend. Now, a failed bounce from here would certainly open the door for a downside directional shift, so I’ll keep it on watch for now.
AOL is a stock on my radar here as it works on this flag. The pullback today suggests it’s not pressuring a breakout yet, so I’m leaving it on watch until price perks up a bit more.
VOYA is one I like for Thursday’s session, but only for a single-day play. Price finished near the low of the session today, so it may need more time, but after a 4-day dip it wouldn’t take much to produce a quick bounce here. I like it on the long side above $34.90 looking for a 2-4% lift as with most single-day plays I consider.
TSLA is another single-day setup here as the base is simply too small to warrant a swing. If price undercuts $118.90 on Thursday, it could spark more selling and provide a nice quick play on the short side.
QIHU is working on a bigger-picture head and shoulders pattern but while we wait there could be some opportunity on the short side within this pattern. A break below short-term support at $83 looks good for a single-day play on the short side for Thursday.
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.
LOCK is in pullback mode here and starting to look similar to the prior dip which was followed by a 10% lift in price. I’m looking for a similar resolution to this pattern so I’ll get long if price clears $17.25 with a stop below the pullback low just in case of a reversal. Earnings are not due out until February so there’s ample time for this one to make a good move.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
