Good evening StockBandits!
The major averages lifted a little today, although the NAZ and RUT each stayed beneath the support zones they broke yesterday. The morning was much like the previous couple of sessions where we saw early strength get met with steady selling. That decline took all the indexes into the red with the exception of the DJIA by mid-day, but that marked the low of the day as buyers stepped in. We lifted in the afternoon, but the gains were generally modest and we largely respected Monday’s range.
Today counts as some dip-buying, but so far it’s not nearly as potent as what we’ve seen in recent weeks and months. Stated otherwise, we rallied today, but it wasn’t much of a turnaround Tuesday. The two tales being told right now are by the NAZ and S&P. The NAZ has broken support and is looking vulnerable to a deeper slide. The S&P 500 seems glued to its range, like a turtle in mud unable to make any lasting progress. It won’t be that way forever, but for now follow through is hard to come by.
My watchlists remain limited tonight. Plays from last night like PETM and AAL produced excellent moves today, and as long as there’s a lack of high-quality swing setups I’m OK with sticking with the cashflow generator single-day plays if that’s all the market is offering. I do look forward to being able to put on more swing exposure and have more capital at work on multiple timeframes, but I’ve found over the years that forcing new positions tends to be a straight path to frustration.
* Later this week we have planned some major site upgrades. As such, there will not be a Charts on Demand video for Thursday, and therefore Wednesday’s update will be the final update of the week. We will be migrating the site to a new server, which may cause some intermittent downtime for the site, including email, or other temporary issues. This will take place after Wednesday’s evening update, which will be emailed out as usual, so unless you are visiting the site after Wednesday’s report you should not notice anything. If you do visit the site, you may notice some unusual things taking place which are tied to the scheduled upgrades. My expectation is that we are back to normal in time for the Sunday update.
Let’s get to the charts.
NAZ – The NAZ ended the day 7 points higher, but respected both Monday’s high and low to paint an inside day. More importantly, it stayed beneath broken support (4246), keeping the path of least resistance down with next support at 4177. The lighter upside volume that accompanied today’s bar also makes it a difficult move to trust as being bullish.
SP500 – The S&P held firm within its range today with an 8-point lift to end the day right in the middle of support and resistance. This is indecision at its finest, so the wait for a catalyst continues for the blue chips.
RUT – The RUT ended the day fractionally lower after painting an inside day. Here again, it finished beneath former support (1182), keeping a short-term bearish appearance with the lower high it just confirmed.
Notable Names:
GOGO is nearing the apex of this wedge and a resolution could come soon and allow price to move with greater velocity. Given the higher lows of the past couple of months, this one looks like it could resolve higher and attempt to continue the recovery after the 3-week short-term pullback ends. I’m going to wait another day as I’d like to see price get closer to the upper trend line.
BAS is another stock that’s looking like it could be ready for a play in another day or two. I like this pattern-above-pattern look and will be looking to get long on a breakout, but first I’d like to see price lift a bit more within this base.
WDC is facing a potential breakout here but I’d like to see it rest first before considering a swing. If instead it happens to break out on Wednesday, I’ll opt for a single-day play on the long side through $90.60 to participate in the initial move.
CNQ is another stock which just saw a nice rally to resistance and could stand to rest before breaking out. However, I’ll take it for a single-day play if it clears $37.70 on Wednesday as that could spark a quick burst of momentum.
RAI is wedging here after a pullback and some much-needed rest. A push through the upper trend line at $54 looks good for a single-day play on the long side, although I’m only interested in the initial move so I won’t be keeping it overnight.
FLS is still looking bearish here. I listed it last night but it did not trigger, so I’m setting it up again for a single-day play on the short side for Wednesday with a slightly revised trigger price of $75.90.
NLSN was listed here a few days ago as a potential swing short, but price rallied and broke the shorter-term downtrend line to negate the pattern. I’ve adjusted the downtrend line and will give this one another shot but this time as a single-day play upon a breakdown to a new correction low of $43.60.
New Swing Trade Candidates:
No new swing candidates tonight, still waiting for better risk/reward profiles by way of tighter setups.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
