Good evening StockBandits!
Today the market averages posted gains, but they were generally modest and it seems last week’s sizzle is starting to fizzle. The NAZ was the exception with gains in high-flyers like AAPL and TSLA as it tacked on 22 for a slightly less modest lift than the other indexes. Volume across the board did decline, however, suggesting that perhaps a pause is nearing after this big rally from last week’s lows.
Tomorrow we have scheduled testimony from new Fed head Janet Yellen before Congress. Although there will likely be plenty of get-to-know-you questions, the market will be reading between the lines and that could prompt some price spikes. Given the short-term stretched nature of the market, a cooling off of momentum would seem to be the path of least resistance, although we’ll have to wait to see what tomorrow holds. It’s been a reversal-prone market in the last 3 weeks, so until the pace slows down a bit I’m going to expect more of the same.
Let’s get to the charts.
NAZ – The NAZ led the way with a .54% gain today despite diminished volume. This index is up 180 points since last Wednesday’s low, so to call it stretched is a bit of an understatement. It’s badly in need of some rest, so stay on your toes in case tomorrow is a Turnaround Tuesday to the downside.
SP500 – The S&P edged past 1798 today but only by a point, so essentially it’s still testing short-term resistance. Today’s lift was minor and volume declined, suggesting the current bounce may be losing steam. It’s been a big lift since last Wednesday’s low, so some digestion would not be surprising at this stage.
RUT – The RUT was positive today and went out at its high, but still only managed a 2 point gain on the day. Given the approaching resistance and the distance it has carried since the low last Wednesday, a rest may be in order soon.
Notable Names:
MON just bounced for the 5th consecutive session today and now is testing the breakdown area from a few weeks ago when price moved beneath the neckline of what was then a still-developing head and shoulders pattern. The backing-and-filling phase for many stocks can be characterized by volatility, and this offers a good example of what that looks like.
ARWR has gone parabolic after a nice series of rallies and minor pullbacks. Whenever that happens, price usually starts getting more volatile and the next rest phase or base tends to be larger due to more time being needed to digest a parabolic run.
HIMX is still working on its ascending triangle pattern here so I’m keeping it on watch. If price gets up closer to resistance, I’ll look to set up a play.
VIPS is on my radar but doesn’t quite look ready for a play. I’d like to see price near resistance first, and as of tonight it’s still several points away. Nice uptrend though, and definitely one to watch.
FFIV is at upper resistance here and could break out any day. The base is too broad at this point to consider a swing, but I’d like to grab the initial breakout move so I’m setting up a single-day play for Tuesday if it can clear $111.
YRCW is sitting in what looks like a tight flag or descending channel pattern here, but the channel is actually pretty wide. It’s misleading because of the huge rally in this stock from the lows of just a few months ago. So a swing stop would be too wide, but I like it for a single-day play on the long side if price clears $22.25.
JAH is testing the uptrend line here from below after breaking it last week. A turn lower and a break of $59.70 would suggest to me the bounce has failed, so I like it for a short sale beneath that level on Tuesday. This will only be a single-day play for me as I’m only interested in participating in the initial turn lower.
MAN is starting to roll back over after a bounce on diminishing volume. All I’m looking for here is a possible test of the recent low, so this is a single-day play for me.
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.
WCC is sitting in a tight wedge here after a big recent rollover from the highs. While price may reverse higher, it has merely stabilized of late despite a big market rebound. I like this setup for a swing trade on the short side if it breaks rising support at $80 with a protective stop just above the wedge, only 2% away. There’s room down to test prior levels in the mid-$70’s from last fall.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
