Good evening StockBandits!
The bulls continued to assert themselves today, taking advantage of yesterday’s lift with upside follow through in today’s session. We saw a modestly positive open this morning, which quickly evolved into a trend day. They showed no concern for tomorrow’s FOMC event, apparently waiving it off as a non-event. We’ll see whether or not that holds true tomorrow, but the expected day of rest discussed here last night did not arrive.
It remains a tricky spot for initiating trades aggressively, as we’re essentially caught in high-level trading ranges for most of the averages for now. In addition, the price action of late has been a bit erratic from day to day, which is keeping the charts rather sloppy. Although there’s still a little room left, we are approaching the recent highs and that could serve as some short-term resistance for prices. Blended with a pretty sharp 3-day lift, there may be grounds for reduced aggression on the long side in many names.
My trading plan for tomorrow will center on abbreviated timeframes for new trades since we’re still caught between key recent levels in the averages. I’m staying selective with new swing trades for now as the best setups available at the moment simply aren’t all that compelling. A few days of basing might make for some dull trading, but it would have a very nice by-product of some tighter bases and patterns from which new swings can be initiated. Until then, I’ll stay patient.
Let’s get to the charts.
NAZ – The NAZ was testing the 4246 level at the end of last week, but just 2 days into this week and this index has some breathing room. The high at 4371 is still about 1% away, and the upside volume on this 2-day bounce has failed to impress. My sense is that those two factors warrant reduced expectations until we see a bit more lateral price action.
SP500 – The S&P finished just 11 points from the all-time high today, but the 2-day lift has come on well below-average volume. For that reason, I am expecting to see this high trading range continue a bit longer. It doesn’t rule out a breakout, as anything is possible, but it just technically suggests there’s not quite enough fuel at the moment to produce a lasting breakout.
RUT – The RUT ended the day just 7 points from the all-time high of 1212. Volume isn’t tracked for this index, but this V-shaped bounce likely has happened on lighter volume just based on what we see in the other indexes. Best case for the bulls would be more rest before a push through the high if they want it to stick.
DJIA – The DJIA put together another solid day today, but still stands some 170 points shy of the March high. That happens to be a lower high compared to the December high, so this index still has much work to be done on the upside before it becomes convincing again. For now, it’s approaching short-term resistance with a major level not far beyond that, which makes for some distinct overhead.
Notable Names:
HALO is a biotech which just held short-term support and is trying to turn higher here. Given the sector, I’m only interested in a single-day play here. If it can show some follow through to today’s strength and clear $14.10 on Wednesday, I like it for a trade on the long side as this recent congestion gives way to some possible momentum.
SGMO is another biotech and therefore just a single-day candidate for me. I highlighted this pattern two nights ago and it finally looks ready here. I like it for a single-day play for Wednesday if it can clear $24.20 and break out from this ascending triangle pattern.
SFUN has a recent history of 1-2 day moves, so all I’m looking for here is a single-day play. If it can clear the trend line at $86.20 on Wednesday, it will be free to head higher as the short-term pullback may have run its course.
DGI is still sitting just above short-term support as highlighted here last night. I’ll be using the same trigger of $31.10 for a single-day play on the short side if that level gets broken on Wednesday.
FLS recently failed at resistance and then rolled over with some accelerated selling last week. It has bounced in the last 3 sessions, but the finishes have been weak and now it’s not far from newly-established rising support. A break below the trend line at $76.50 looks good to me for a single-day play on the short side. If instead this base matures for another day or two, I may consider it for a swing. Tonight, the pattern is just a bit too small to expect a lasting move.
SYNA fell out of a wedge last week and has bounced back up to test the breakdown area. It hasn’t reclaimed it, and price looks to be stalling out. A turn down and a break below today’s low could trigger more selling, so I like it for a single-day play for Wednesday on the short side if it undercuts $61.50.
New Swing Trade Candidates:
No new swing candidates tonight. Still waiting for better risk/reward scenarios to set up, and will stick with single-day cashflow trades for Wednesday’s session.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
