Good evening StockBandits!
What pullback?! Monday’s trend day to the downside was essentially erased with aggressive buying today. True to form, the bulls quickly stepped in to defend their territory (and recent progress) today as the open marked the low of the session and stocks reversed right back up to finish right near Friday’s closing levels. It seems as though it’s going to take quite a bit more than a single day of healthy profit-taking to shift the mood of this market.
The S&P 500 last week pulled back for a couple of days, only to bounce back sharply on Friday and post a new high. Today we saw the same feat with Monday’s retreat being fully negated en route to an incremental new high.
Although the uptrend is still very much intact, I think it’s notable what’s happening in the last few sessions. Volatility is expanding a bit here. The buying has been methodical for a few weeks, but now with some wider-range bars starting to emerge more frequently. The DJIA, for example, went from Jan. 2 until Feb. 1 (Friday) without a triple-digit day, and suddenly they’re becoming more commonplace with 2 out of the last 3 sessions (today missed marking another one by less than 1 point). If anything, that’s a reminder that conditions may be becoming a bit more emotional at this stage in the rally.
There’s not a lot new to share tonight aside from a pair of railroad stocks which look good. I’m not going to force it when the setups are sparse.
I am doing another webinar on Wednesday evening in conjunction with MoneyShow in case you missed the one I did last week. This will be very similar material with a few changes. It’s scheduled to last about an hour with Q&A, and I’d love for you to join us. It should be recorded but I’m told the recording will only be provided to those who pre-register (even if you can’t attend live). Here’s the link with details where you can register (it’s free).
Let’s get to the charts.
NAZ – The NAZ had broken its short-term rising trend line yesterday, but came ripping back today to get back above the resistance from last week at 3161. It’s now once again within arm’s reach of the 52-week high, and everyone’s wondering whether or not it can clear the all-important hurdle at 3196.
SP500 – The S&P painted a new intraday 52-week high today by clearing Friday’s high, marking yet another aggressive rebound after a short-term dip.
RUT – The RUT is getting a bit more lively here in recent sessions. Today it rebounded quickly from Monday’s 1.3% decline to leave it just 4 points shy of the all-time high of 912.
DJIA – The DJIA keeps zig-zagging across 14000 and tonight is less than 220 points from its all-time high of 14198 from October 2007.
Notable Names:
AMZN reported earnings and can’t seem to pick a direction here as it keeps waffling back and forth between a wide range. From the low end to the high end of this range, it’s about 10%, so there’s lots of movement here but just as much indecision. This one needs more time before it’s tradable again.
EXP is sitting in a beautiful base here and I would set it up for a swing trade if not for a scheduled earnings announcement tomorrow afternoon. It may produce a quick pop before then, although this is not a swing candidate with that big news looming.
MCO is selling off hard in sympathy with MHP, which owns the ratings agency Standard & Poor’s. That agency is under investigation from the Department of Justice related to its ratings of Collateralized Debt Obligation and Residential Mortgage Backed Securities from the housing crisis a few years ago. Technically, one could not have seen this huge selloff coming, but the uptrend line of the past few months certainly gave an early warning that the character was shifting. This is a great example of why paying close attention to levels and keeping stops in place can save a lot of heartache, as those with mental stops likely are sitting on hefty losses after this 2-day spanking.
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.
NSC is sitting in a tight falling wedge pattern, and often these get resolved to the upside. A turn higher through $69.40 opens the door for a return of recent momentum with room to fill the gap from last fall and possibly approach the highs. I’ll be setting targets just ahead of those levels, and really like the risk/reward this play offers.
KSU has been making highs and just put in some needed rest. A push up through $95.40 would be a breakout, and I’ll be looking for a measured move similar to the previous rally we saw in January. I’ll be using rising short-term support as my initial stop.
Tonight I’m going to do something a little different to help with the watch list stocks. The table we usually use does not convey to the emailed version, so many of you simply see [“table id=415”] or something similar. Those of you who login still get the table, which makes it easy to copy/paste those symbols into your charting program and review them further. I’m going to just insert a pair of links tonight as well which will pop up a new page with the charts already on them.
Let me know which one you prefer best, the table or these links to the charts, by sending me an email or posting a comment beneath this post inside the Hideout.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
[table “415” not found /]Trade Like A Bandit!
Jeff
Links to the charts is better than table. Would also like a spreadsheet summary of all trades in play buy/stop/t1/t2.
Thanks Peter for the feedback, and the spreadsheet is on the way!