Good evening StockBandits!
The shallow pullback of the past few sessions threatened to intensify this morning as a soft open was met with more selling in the opening hour. Another V-shaped intraday bounce arrived, sparking an upside reversal for the NAZ, RUT and S&P 500. In each of these cases, today’s turnaround to the upside suggests the pullback has been completed.
Nothing is ever a certainty in the market of course, so that always should go without saying. However, the tests of recent breakout zones and gap fills followed by an upside reversal day like this does pave the way for the bulls to resume the uptrend if they want it. Bears had reason to cover shorts, and the positive close well off the lows of the day certainly left many of them disappointed.
The pullback we’ve gotten has alleviated some of the overbought conditions we had been seeing, which is a positive thing. My watchlists have contracted though, due to the failure of many patterns which had been building. Tonight it’s pretty lopsidedly bullish. There are a few setups which interest me, but not for new swings as the risk/reward profiles I prefer simply aren’t present. Instead, I’m opting for some single-day plays to create cash-flow while waiting for better swing candidates to surface.
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Let’s get to the charts.
NAZ – The NAZ finished the gap fill today and then responded with a sharp 53-point upside reversal and a finish at the session high. That validated the gap fill and may allow the bulls to work prices back up toward the 4371 high soon. Note the higher lows over the past few weeks showing dips to be short-lived as buyers of weakness continue to emerge aggressively.
SP500 – The S&P also has higher lows in place and today got 4 points from 1850, the prior breakout level. The 14-point rebound which followed was solid, and appears to have been a successful test. This also leaves this index less than 1% from highs tonight.
RUT – The RUT tested the prior breakout zone of 1182 today, temporarily undercutting it but only for a short time. It was able to reclaim that level and then continue higher, finishing positive on the day for a successful test.
DJIA – The DJIA didn’t pull off the upside reversal which the other indexes achieved today, but it did see a lift from the morning low to finish only fractionally lower. This index has lagged in recent weeks, making today’s underperformance unsurprising.
Notable Names:
MA just held rising support instead of breaking down, and now could be heading back up for a test of recent resistance. An upside break through $79 would allow it to continue the recovery. I’m keeping it on watch for now.
FANG is also on my radar but I’m not setting up a play here yet. I like the overall price action with this descending channel, but would like to see price edge closer to upper resistance before setting up a breakout play.
WWE may need more rest than the past 4 days, but it has had a lot of recent momentum and could get going again soon. I’m keeping it on watch and willing to redraw my trend lines if need be. It’s holding up nicely, which is a good way to digest the recent rally.
SFUN finished negative today but it lifted $2.65 from its low. That’s positive and it puts price within reach of the steep descending trend line. A cross through $88.60 and I’ll take it for a single-day play as it snaps back.
GME is facing a short-term trend line here and a push north of $38.70 could set it free to start filling some more of the gap from a couple of months ago. The recent lifts have been 1-2 day efforts, so this will only be a single-day play for me if it goes.
SUNE is working on a falling wedge here and for a swing I’d like to see it tighten. However, if it goes here with a breakout at $20.90, I’ll opt for a single-day play as price heads back to challenge or clear the recent high (which is $1 higher).
IACI turned higher within this falling channel and a breakout may happen soon. I’ll get long upon a break through $77.30 as price regains strength and heads back toward the recent high. I liked today’s volume expansion as well, which validates the notion that the short-term pullback may be completing.
New Swing Trade Candidates:
No new swing candidates tonight, sticking with existing positions while waiting for more setups to build and mature.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
