Good evening StockBandits!
The bulls and bears scratched today as the indexes finished little-changed and mixed. The DJIA gained a whopping 7 points while the NAZ added 2, with the S&P 500 losing 2 points as the RUT finished incrementally lower. Momentum was fleeting on this first session of a holiday-shortened week, and volume stayed light as expected. Activity should only diminish as the week progresses, given that this is always one of the two lightest volume weeks of the year. Traders typically step away from their screens to travel, enjoy family time, or simply avoid pushing buttons when the price action is more likely to be fickle due to the lighter activity.
About the most exciting news of the day today was that the NAZ pushed past 4000 intraday, although it did not close above that level. That follows the S&P 500 (1800) and DJIA (16000) as the latest to clear a large round number, but it’s still a far cry from 5132 from March 2000. At any rate, the bulls are still enjoying both the psychological and technical edges right now, which could keep a bid beneath this market for a little while if the news flow continues to support it.
I’m still sitting in a handful of swing trades tonight with both long and short exposure. As new swing setups come available, I won’t hesitate to add them, but I have realistic expectations when it comes to adding new positions given that it’s Thanksgiving week. There should be some nice single-day plays to create some cash flow opportunities, however, just as we saw today with last night’s selections in SCTY and FB.
Let’s get to the charts.
NAZ – The NAZ pushed past 4000 today, but couldn’t hold it, eventually finishing at 3994. However, this does confirm the higher low that was carved out last week, keeping the pressure for now on the upside. The lack of conviction with today’s action may simply be setting the tone for a choppy holiday week.
SP500 – The S&P held 1800 today, but also showed a lack of conviction today with a narrow-range day and a finish off the high. This index also has higher lows in place over not only the past year, but also in recent weeks. The test of the 1775 breakout zone we saw last week kept the bulls in the driver’s seat, and they can afford to take a breather here if they so desire.
RUT – The RUT keeps dancing around 1123, the October high. This index has pushed past that level in each of the last two sessions, but can’t seem to get clear of it. Higher lows are in place from the last couple of minor dips, but the lack of upside on this breakout so far gives this small-cap index more the look of a trading range for now.
DJIA – The DJIA held firmly within its uptrend channel today with a minor 7 point advance. It still has room up to the upper end of the channel near 16200, and room to the lower trend line near 15865 before the pace of the current advance would be threatened.
Notable Names:
QIHU has been building a large head and shoulders pattern in recent weeks but today made a big stride in that direction with a 9.4% decline on the session. Price is now just about 2% from the neckline (near $77), and could break down any time. I’d like to see a bit of rest above the neckline to set up a play in the coming days.
TWTR is at a new low tonight after breaking support today. The initial day of trading still marks the high for this highly-anticipated IPO, and it’s looking much like FB after it went public back in May 2012. Interest is diminishing here and some level of support will need to be established before any bargain-hunting should be done here.
CLR looks to be in the process of topping here as price begins to test support around $107. Volume spikes in recent weeks show distribution and now I’d just like to see price test support in a more quiet fashion for a few days. That would not only validate a breakdown zone for entry, but also set up a natural stop on the upside in case of a reversal. For now, it’s on watch for me.
LCC has pulled back quietly here and appears ripe for a quick pop. A turn up through the trend line at $24.60 looks good for a single-day play for Tuesday on the long side. I’m only interested in participating in the initial move and am not expecting continuation, so I’ll be out same day if this one triggers.
WNR is working higher within its pattern as highlighted here lately. However, the holiday-related volume is light, so I’m not setting this up for a swing. Instead, if price clears $39.05 on Tuesday, I’ll just go for a single-day play to participate in the initial move up and out of this high-level pennant.
VJET is oversold after a nasty rollover last week and that opens the door for a continued dead-cat bounce. This is an unusual type of setup for me, but these ‘hook’ patterns can prove valid especially when they coincide with a clear level like this one does. I’m looking at this one for a single-day play on the long side for Tuesday if price can clear $39.80.
EGN is resting just above support tonight and actually has a bit of room. It may need more time, but I like the pattern here so I’m going ahead and setting up a single-day play for Tuesday on the short side if this one breaks $71.60 to mark a new low. That could trigger some stops and provide a quick opportunity to participate in an initial breakdown move should it happen.
New Swing Trade Candidates:
No new swing candidates tonight, sticking with existing positions while waiting for new opportunities to surface.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
