Good evening StockBandits!
With another FOMC meeting, earnings reports and a jobs number to contend with last week, the indexes navigated it all smoothly and pushed onward and upward to end the week at new recovery highs. That included more all-time highs for the RUT, and 52-week highs for the S&P 500 and DJIA (now back above 14k). Meanwhile, the NAZ pushed past the October high and now is within arm’s reach of its 52-week high despite AAPL still serving as dead weight.
Despite the bears not getting any breaks at all and underinvested bulls feeling left behind, this market simply won’t relent. That’s keeping the upside pressure on the tape as even the smallest of dips get bought. We saw that play out last week with a couple of minor declines being quickly followed by new recovery highs.
There’s no question this market has carried a long way in a short time, but that in itself isn’t enough to start betting on a pullback. The longer it takes to get one, the more likely the odds become that we finally see some selling, but the short side still isn’t the one to favor in such a strong environment like this one. There is still an abundance of long-sided setups, which I’m focusing on while maintaining stops just in case of a shake-up.
I’m getting out the Sunday report early in hopes of adding some convenience for you since it’s Super Bowl weekend and Sunday has so many social events tied to that occasion. I hope it helps!
By the way, some Bandits have reported not receiving their emailed reports but then discovered they were landing in their Bulk/Junk folders. If you have not been getting the emails, please be sure to look there in your email program.
Let’s get to the charts.
NAZ – The NAZ hopped over the short-term hurdle of 3161 last week to clear that first lower high from October at 3171, finishing at 3179. It’s now just 17 points from a breakout, and after this rest it could be poised for some rotation into this index which has lagged the others.
SP500 – The S&P pulled back 3 out of 4 sessions from Monday through Thursday last week, but didn’t give up any ground in the process. Instead, it got back in a groove on Friday with a solid 1% rally to lift it to new highs. The all-time high is at 1576, which is coming into view somewhat quickly as this index keeps painting green bars.
RUT – The RUT acted like it might finally take a rest on Wednesday with a 1% pullback, but it was an anomaly as the buying continued on Thursday and Friday to lift this index to more new all-time highs. The big run continues for this index as it approaches a 20% gain from the November low. Very impressive!
DJIA – The DJIA put up its first triple-digit day on Friday since January 2nd, capping off a short rest phase for this senior index. It’s now just 189 points from its all-time high.
Notable Names:
RTN is a great example of a stock which just changed character in a big way. Aside from the channel breakdown here, the way it happened is just as important. With very persistent selling for the past 2 weeks on very heavy volume, distribution has been the new norm. This is the type of move that gets followed by failed bounces, so I’ll be watching for shorting opportunities as feeble-looking bounces come along.
YPF is resting here after a big push through resistance early last week. This has the early makings of a new base building on top of the prior one, which is a great look and a second-chance type of setup if it can develop a bit further.
EXP is working on an ascending triangle pattern here, and looking very good. I’d like to see a bit more lateral movement in price to keep it inside the triangle, which would narrow the risk associated with this setup by allowing the lower rising trend line to get closer to the breakout zone ($67.50).
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.
CCL is churning here at the upper end of a $3 channel and may get going again soon. A breakout through $39.50 triggers a buy for me as it starts a new leg up with a projection $3 higher. That gives this a reward:risk ratio of 3:1.
NAV has shown some nice recent momentum and now is pausing to take a breather. Volume on this little rest phase has been quiet, which is ideal. A push up through $26.80 paves the way for a return of momentum with room to run toward some prior resistance areas from last summer.
NBR has carved out some higher lows in recent weeks and just showed some great momentum in January. For the past several days, it has moved laterally to create a bull flag pattern. A breakout through $17 and it’s free to climb back toward broken support from last spring at $18.60. Earnings are just over 2 weeks away, so there’s some time for this one to work but I do plan to be out ahead of the news.
BAX has been seeing some accumulation for the past couple of months as pullbacks get shallower. That points to buyers stepping in a bit more aggressively while lateral overhead resistance has remained intact. This setup is building up some pressure for a resolution soon, and Friday’s strong finish and the prevailing uptrend suggest that could be on the upside. I’ll get long if $69.10 gets cleared and will use rising support as my downside safety net (stop), looking for a measured move higher from this $6 triangle.
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Trade Like A Bandit!
Jeff
APC closed out ahead of earnings this afternoon @ 80.50 for 3.2%. Would have liked to see a test of Friday’s high but with a weak tape I’ll take what I have in the trade and avoid the earnings gamble.