Good evening StockBandits!
This morning we got what looked just like Monday’s action with an early dip and a V-shaped bounce. While Monday’s rebound held, today’s did not and was instead met by persistent weakness for the remainder of the session. By the closing bell, each of the averages were near their lows of the day and solidly in the red.
Although today’s rollover move created an intraday downtrend for a few hours, it didn’t exactly create any technical damage. It proved to be a bearish engulfing bar for both the NAZ and RUT, but aside from that we got little to point to as a big change of character. At this point, we’re still above the recent breakout zones, and until we see those fail the bulls still get to claim the edge.
Interestingly, the 3 long-sided candidates I highlighted here last night as swing trades each failed their respective patterns and have been subsequently removed from the Candidates list. None of them triggered entries, but it’s curious that none of the best 3 setups I could find last night were able to confirm, and instead each of them negated their respective patterns with downside breaks. It’s always important for patterns to confirm before entering, and each of those serve as the most recent of why that is the case. However, should we start to see more of the bullish setups fail, it will be something to keep in mind.
Let’s get to the charts.
NAZ – The NAZ put up its fourth straight decline today, but two things were different. The first was the size of the decline, which was larger than the previous three days. The second was the expansion in volume, which points to intensified selling and broader participation in the decline. Price still hasn’t quite filled the gap to 4277, and remains above the recent breakout zone of 4246, so it still technically has some breathing room. However, any continuation from here could bring those levels into view.
SP500 – The S&P gave up .5% today after getting within 1 point of the 1883 high. The intraday turnaround points to short-term rejection at resistance, although here again this index does have a little more room down to 1850. That’s the big number which bulls will want to defend in order to avoid a breakout failure.
RUT – The RUT pulled back 1.1% today to test the 1882 area, stopping just 1 point above the former high. Whether or not that will continue to hold as support, we will see, but the lack of follow through to last week’s big spike higher is noteworthy.
Notable Names:
PLUG has gone crazy in recent weeks with massive upside, particularly in the past 7 sessions. Today it reached a new high, only to reverse in spectacular fashion and give up nearly half its value. Others with similar moves include BLDP and FCEL. Regardless of the ticker, the story is still the same, which is that momentum cuts both ways and cannot continue without ending badly.
SYNA was listed here last night as a swing candidate, but today did not trigger an entry. I’d have left it on the list if not for the negated pattern, which in this case was the downside break of the triangle. That’s not bullish, so it’s off my list like the others which were also removed under the same circumstances. This is why I wait for the upside break before buying, as these moves never hurt when the technical buy point does not get crossed.
C is basing in a bearish wedge here beneath the long-term uptrend line. This isn’t the market leader by any stretch, but keeping an eye on financials which are behaving poorly is always worth doing given the financial exposure in the S&P.
MYL is on my radar for a single-day play for Wednesday. Being a drug stock, I’m not interested in an overnight, plus it has had a number of large gaps lately. If price clears the upper trend line of this wedge at $54.40, I’ll get long and see if it can gain some momentum.
DLTR is another on my list for Wednesday, this one having a $54.75 trigger price where the descending trend line currently sits. A push through that level and price has room to potentially run a couple more points before it hits next resistance.
ROST is building a bull flag or pennant here but the pattern could stand to mature. Should it happen to break out on Wednesday, I’ll take it for a single-day play through the $72.85 level. Here again, it has a couple points of upside before the prior high from January would serve as resistance.
RIG is still on my radar from last night, so I’m taking the same setup for Wednesday. I’m interested in a trade on the short side to participate in the initial breakdown if price undercuts $41.10.
DECK is trying to roll over here after a short-term bounce. If it shows some downside continuation with a break below $74.70, I’ll get short for a single-day play, just looking to hop on board as price turns back down toward recent support.
New Swing Trade Candidates:
No new swing candidates tonight, several patterns were negated today so I’m waiting for new setups to emerge and sticking with existing exposure for now.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
