Good evening StockBandits!
The indexes kicked off the new week by spending much of the day underwater, but only slightly. Big momentum was never found in either direction, and the day was choppy to say the least with rolling price action which kept gradually expanding the trading range on the day. The bulls had the final say for the day though, as modest afternoon strength left the indexes going out at their highs and slightly in the green by the closing bell.
The DJIA continues to dance around the idea of new all-time highs, and today got to within about 70 points from the 14198 level set back in October 2007. Meanwhile, the other averages are continuing to rebound from the late-February dip but haven’t yet returned to their highs.
Late strength today and the upticks of the past few sessions is making for a sneaky advance taking place here. In the short-term, this market remains range-bound and therefore still has more to prove. However, the intermediate term trends are still up and that’s not something to forget about, regardless of how sleepy the price action may seem. It’s entirely possible that we’re nearing a point of decision here soon as we see whether the current bounces will fail or find follow through to continue the rally which began in November.
Volume is likely to play a critical role, and in that regard lately it has felt more like spring break came early. It’s a big week for economic data, and the end of the week jobs report is the most anticipated event on the schedule so that could prompt higher levels of activity.
Let’s get to the charts.
NAZ – The NAZ continues to respect multi-day resistance at 3186 here after yet another price advance on weak volume. This index remains caught between key levels at 3213 and 3105, which could mean more choppy price action in the coming days until we finally see an exit from this range.
SP500 – The S&P also remains range-bound and today put up its 4th advance in 5 sessions. Upside volume has been consistently light, however. The high at 1530 is within spitting distance, and a solid breakout could deliver a push toward the all-time high at 1576. Volume will be a critical element of a breakout attempt.
RUT – The RUT is respecting the 917 area where the broken uptrend line currently stands. This small-cap index is still churning beneath the 932 high but has lifted 5 straight sessions now since testing 894 support. Another trading range for now.
DJIA – The DJIA continues to trade inside this megaphone pattern and today lifted near last week’s high of 14149. It finished just about 70 points from its all-time high, so it may not be long before it attempts to paint a new one on the chart. Here again though, upside volume is a cause for concern among bulls since today’s lift to a new closing high was not confirmed.
Notable Names:
RCL is proving unable to reclaim the channel it broke down from a couple of weeks ago. Often times trend lines can be extended and continue to serve a purpose, and this is one of those cases. Aside from the industry woes of late (CCL Triumph), short-term lower highs are in place and this stock looks to be still in a correction phase.
RHI is in a longer-term uptrend but lately it has been putting in some healthy rest. This stock has found a support level which it has been respecting, although it’s not yet attempting to lift from that area. For that reason, I’m willing to wait for more bullish price action such as stronger finishes and advancing volume before considering a play here.
SPWR is pulling back here off its recent high and the small descending trend line offers a pivot for a trade on the long side. However, with no well-defined stop loss tied to this chart, it makes for a better momentum setup than a swing candidate at this stage.
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.
ACM is in a tight symmetrical triangle pattern and today price started to perk up a bit. This wedge is very compressed and we should see a resolution soon. Given that the trend is up, I’m looking to get long if this one clears $30.60, and I particularly like how light the downside volume has been over the last couple of weeks following a high-volume advance in price.
MDP has created a clean falling wedge here or bull pennant since its recent spike in price. A turn up through the upper trend line at $41.95 creates a risk/reward scenario I like here with support just below. This stock could quite conceivably attempt to test the recent high or move beyond it, so I’ll get long upon a breakout. I’m leaving an open 2nd target for now and will look to update the grid at a later point in time if this one is able to trigger an entry. Should this pullback continue, it would negate this wedge pattern.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
