Good evening StockBandits!
The bounce carried over into this morning with another gap to the upside. Once again, the early strength prompted some cash-raising, although we didn’t quite fill the entire opening gap. The mild pullback stabilized, and by mid-day the market was painting new session highs. From there, we saw a few hours of churn before some afternoon strength took stocks out near their highs of the day. It was a day where the closing numbers were a bit misleading, as some of the upside came by way of a gap and we did plenty of churning intraday.
Upside volume was distinctly absent today as the rebound showed some follow through, continuing to create yet another V-shaped lift off the pullback low. Traders have been conditioned in recent weeks to utilize strength for lightening up, so until that changes we could easily see more of the same. Although there are some long-sided setups of interest to me here, I’m keeping that in mind and sticking with single-day plays for tomorrow’s session rather than setting up new swings after a sharp lift. The bulls still have plenty of convincing to do in the short term.
Tomorrow is the final trading session of the week with the market being closed for Good Friday. With conviction lacking as this bounce unfolds, understand that we could see some very quiet action in Thursday’s session. If there’s a lack of momentum in place by the time the afternoon rolls around, don’t be surprised to see the volume thin out as traders step away from their screens to start the long weekend early. To put it another way, tomorrow afternoon is not likely to be a good time to trade heavily, so stay light if you’re active and otherwise stay selective.
* I will record the Charts on Demand video tomorrow, so send me an email with the tickers you’d like to see reviewed (you can reply to this one).
Let’s get to the charts.
NAZ – The NAZ closed strong today after a gap higher, but it only closed 20 points above where it opened, so there was limited upside intraday. Volume is also not confirming this move, and price is still 99 points from the prior high. The futures are off tonight as well following a miss by GOOG, which looks to be tossing a wet towel on this rally. Lower highs are still the norm until the cycle is broken.
SP500 – The S&P reclaimed 1850 today and now is just 10 points from the prior bounce high. It’s back in the range for now, but still has more to prove. Bears are hoping for another lower high, and bulls are hoping for a shallow pullback to form a higher low.
RUT – The RUT continued higher today to reclaim 1123 after a failed test from below yesterday. 1147 and 1160 look likely to be big resistance levels if we see more strength.
DJIA – The DJIA lifted further within its range today to finish just 32 points from the prior bounce high. After a failed upside breakout and a failed downside breakdown, indecision is running high.
Notable Names:
LXK is turning higher within this pullback channel and an upside exit at $46.60 looks good for a quick pop. I like this setup for a single-day play on the long side with room to challenge the recent high near $48.
PEIX just held support and now faces a small descending trend line of resistance. A push through $14.90 and we could see this one spike higher, although I’m only interested in a single-day play if it goes.
QCOR is trying to stabilize here after a multi-day pullback. A turn higher through the trend line at $79.10 could free it up to move higher as there’s several points of room before recent resistance would be met. It’s a biotech and I’m only going to take it for a single-day play if it clears the trend line.
FDO is stalling out after a bounce and upside volume is severely lacking, giving this chart the look of imminent failure. If price breaks rising support at $56.80, I like it for a single-day play on the short side as the selling kicks back in.
EA is working on a bearish rising wedge here. It may need a bit more time as it closed strong today, but it’s still in correction mode since topping last month and downside vs. upside volume confirms that. If it does break rising support at $27, I like it for a single-day play for Thursday’s session.
New Swing Trade Candidates:
No new swing candidates tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
