Good evening StockBandits!
The bears found it no joke today that the S&P made new all-time highs. The surge higher right off the open added to an already positive start and took the S&P 500 past its 1883 resistance zone. Meanwhile, the DJIA pushed north of the lower high it had established in March at 16505 to get within 23 points of its all-time high from December. Both the NAZ and RUT also continued their short-term bounces to reclaim recent key levels at 4246 and 1182, respectively. The early strength abated mid-day with a mild pullback, but that was also bought and the day ended with the market at its highs.
It wasn’t a perfect rally, so there are a few things which should not be overlooked. The S&P breakout was incremental. No other index was able to make a new high. Volume was below-average across the board. But the bulls get to claim it because price is most important and the dip is still being bought.
The V-shaped nature of this move right off oversold conditions last week has left fewer high-quality setups to consider tonight for plays in tomorrow’s session. I did put on a pair of new swing trades and closed out RGR, but don’t see anything new tonight to add to the mix on the multi-day front. Instead, I’ll take a few single-day plays and go with a stick-and-move approach while waiting for some basing action to arrive.
Let’s get to the charts.
NAZ – The NAZ finished tonight more than 136 points off the low of last Thursday, so this has been a quick lift. Today’s move propelled it past the 4246 level, which has served as both resistance and support since January. It’s still a long way to the high of 4371, but the further this bounce carries, the better the chances will be for the bulls to produce a higher low on the next pullback.
SP500 – The S&P finally pushed past 1883 today, but only by a couple of points. Today’s advance was solid and it paves the way for more upside, but the bulls will need to be quick to produce it in order to avoid a failed-breakout scenario. Just last week we saw a break below 1850, but it only lasted a day before a reversal. Such is the nature of trading ranges, so let’s see if the bulls can build on this incremental breakout.
RUT – The RUT ramped another 1.3% today to end the session 41 points off last Thursday’s low. This large V-shaped move makes for some sloppy charts, which is keeping my trade selection pretty limited tonight. The high of 1212 is still some 24 points away and price is becoming stretched rather quickly here, so some basing would be a good way to digest this lift. The bears are looking for another lower high, so the next dip should tell us quite a bit.
DJIA – The DJIA is less than 60 points from a new all-time high after today’s push past the former lower high of 16505. This index has found lasting upside hard to come by for the past several weeks, so it may need considerably more volume in order to produce a breakout which sticks. First things first though, and 16588 is the number to watch.
Notable Names:
YY had rallied 10% with the Friday-Monday lift from its Thursday low, leaving it already somewhat extended and on light volume. Today, however, it ramped another 7% to break out of the descending channel in very unexpected fashion. Moves like the one we saw here today are extremely difficult to participate in given the technical aspects of the recent price action, but there are quite a few of them tonight. A little basing would go a long way.
MPEL quickly sprang back to life with a quick 3-day lift of 19.5% into today’s high. It went from hitting the dirt to looking as if it’s not at all sick. Although there are charts with this look, the fact is that V-shaped moves require stepping out in front of the proverbial freight train, which simply isn’t my play. The difficulty is in determining an exit, so I’ll continue to pass on this type of play for that reason.
ATI is still looking ready to go here so I’m going to give it a shot tomorrow for a single-day play if it can break out through $38. Every day of rest after the recent run is healthy, so another day of basing like we saw today is certainly beneficial. It’s still looking like some thin air here, so I’m only interested in a single-day play.
TWTR is stalling out here after a bounce and looks good to me for a single-day play on the short side if it starts to roll over. A break below $46 would undercut today’s low and open the door for some sellers to return.
RIG is testing former support here and so far has been unable to reclaim it. There’s also rising support from the recent low, and a break below $40.70 looks good to me for a single-day play on the short side. I’m not looking for a huge move, just a quick retreat back toward the March low.
GTLS is caught in a downtrend with many lower highs in recent months. This minor bounce looks to have run its course and today’s downside reversal could easily find follow through. I like this setup for a single-day play on the short side if it breaks $78.50 in Wednesday’s session.
New Swing Trade Candidates:
No new swing trades tonight, sticking with existing exposure while waiting for better bases to form.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
