Good evening StockBandits!
Last night I discussed the NAZ in particular as suspect when it came to more upside until we got at test of 3966. We had a light-volume bounce yesterday, and it just appeared as though we’d have to get down to test and validate the big level which had served as both resistance and support going back to last October. Today we got that test. It started out a bit like Monday with another upside gap which again invited selling. We trended lower into early afternoon when another V-shaped recovery kicked in to take the market positive on the session for another Turnaround Tuesday. By the closing bell, each of the indexes had gained some ground, although none of the advances were particularly outstanding.
To see early strength fail today and mid-day weakness spark some buying made for a particularly turbulent day. The NAZ range, for example, was in excess of 108 points. That of course offered a lot of movement for intraday traders. We may have finally become short-term stretched enough on the downside to produce a bounce which lasts more than a few hours, although tomorrow will be the deciding factor on that.
Tonight we’re in a similar situation where the volatility of the past few sessions has left a limited list of candidates for me. It’s an abbreviated list for me, and these only interest me for single-day plays. In a fickle environment like we’re in, things can shift quickly from day to day. My hunch is that after this bounce runs its course we may have a shot at some swing shorts, but we’ll have to see how it pans out over the next few days.
Let’s get to the charts.
NAZ – The NAZ broke not only the February 5th low but also 3966 for a short time today before a big snapback rally of 88 points off the session low. Having gotten some 239 points off the mid-week bounce high of last week into today’s low, a bounce is not out of place here. Volume improved with all the activity we saw today, but it’s still a long way to the prior high if the bulls are going to break the streak of lower highs.
SP500 – The S&P held above last week’s low and was able to tack on 12 today on some improved (but not heavy) volume. It’s still beneath 1850, as well as the prior bounce high from last week at 1872.
RUT – The RUT lifted 24 points from its session low today to finish green, which sets the stage for a potentially better bounce over the next couple of sessions. To see a snapback into positive territory just hours removed from a new correction low is not something to overlook. However, it still has plenty to prove given that it’s still beneath 1123 and still 41 points shy of last week’s bounce high of 1160.
DJIA – The DJIA added to Monday’s gains after holding support which was reclaimed yesterday. It lifted further into the range, ending the day about 194 points shy of last week’s bounce high. It’s still channel-bound for now and has some room to fluctuate in both directions before anything meaningful happens.
Notable Names:
AAPL has found $514 to be a very important level for some time now, and today it tested it from above. So far, the test is successful, although the stock still finished red on the day. It has a couple of short-term lower highs even since the late-March bounce high, which will need to change in order to expect any lasting upside.
TSLA also finished red today despite a NASDAQ bounce, but filled another gap from February. This backing and filling process is healthy long-term, but the price action still isn’t bullish yet.
AMZN bounced intraday from a new correction low to finish fractionally higher. The real key for this online retailer is the descending channel it’s caught in, so keep an eye on the upper trend line as a potential tell. Tonight that stands near $322.
LULU is basing here after a modest pullback and could soon head higher again to continue working on the partially-filled gap from January. I’ll be watching for a stronger close which takes price closer to the small descending trend line as a timing indicator that this one is perking up. Today’s advance didn’t impress me so it may just need a little more time.
PDCE is facing a mid-level breakout here after several weeks of choppy basing action. A push through $63.20 looks good to me for a play on the long side, although a swing stop would be a bit wide for my taste so this will only be a single-day play for me if it goes.
ZU is attempting to stabilize here after a significant pullback off the late-February high. A turn up through the short-term descending trend line at $48 could prompt a quick spike higher as shorts scramble to cover. I like it for a single-day play on the long side for Wednesday if it can clear $48, but a swing stop would belong beneath support and in the current environment I’m just not comfortable giving it that much room.
GPRE tested the late-March pullback low today and bounced back. Tonight it’s facing a descending trend line, which sets up a pivot for a play on the long side. Given the distance to an appropriate stop beneath today’s low, my preference here is to take it for a single-day play on Wednesday if it’s able to clear $28.10. I think it could pop nicely, but I’m only interested in the initial move higher.
NFX is coiling here just beneath the highs and is facing a breakout any day now. I like it for a single-day play on the long side for Wednesday if it can make a new high at $32.95 to participate in the initial move higher.
New Swing Trade Candidates:
No new swing candidates tonight after some volatile sessions in recent days have left a lack of bases worth considering for a multi-day timeframe. Note the updated earnings date for RAI to 4/23 as reflected now on both Yahoo! Finance and EarningsWhispers (previously showed 4/21).
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
