Good evening StockBandits!
The indexes went green this morning as they stretched into their third consecutive advance, but the enthusiasm fizzled and the highs of the session were set within 75 minutes of the opening bell. From there, we saw a pullback and then a few hours of choppy price action with stocks unable to regain any momentum. Both the NAZ and RUT gave up some ground, while the S&P and DJIA each finished modestly higher on the day after tagging new all-time highs this morning. Overall though, it was a pretty lethargic day with narrow ranges, light volume, and neither side willing to keep their hands on the steering wheel.
Today essentially goes down as a rest day since we saw nothing particularly noteworthy occur. It’s not as if prices reversed sharply lower in today’s session either, so to see a little bit of profit-taking kick in isn’t unusual after a quick lift from last Friday’s lows. The bulls can find some comfort in seeing the market stabilize after the late-morning pullback. However, the daily charts for the NAZ and RUT still have plenty of headwinds, so the bulls still have plenty to prove.
My watchlists are pretty evenly split tonight between bullish and bearish setups, and overall we still have two very fickle indexes at a minimum. With the price action looking somewhat likely to stay choppy, I’m expecting to stay pretty light on my feet in terms of swings. QCOM had been on my list but never did trigger an entry and instead has been grinding higher, resulting in its removal tonight. NLSN looks close to triggering, but I’m still in cash tonight while waiting for more plays to surface. Until they do, I’ll keep taking what the market has to offer, whether that includes single-day plays, swing trades, or a blend of both.
Let’s get to the charts.
NAZ – The NAZ was able to get past a minor high from two weeks ago today, but ultimately stayed well shy of 4185 resistance and finished negative on the day. This index remains in a mid-level trading range, so lasting follow through simply cannot be expected until an exit from the range is seen.
SP500 – The S&P edged past 1900 today but couldn’t hold it on a closing basis. Upside volume was lethargic, as was the price action on this narr0w-range day. We should know pretty soon whether or not this breakout is going to find some real follow through or if instead it’s going to simply result in an incremental higher high before another pullback and breakout failure.
RUT – The RUT gave back half of Monday’s move today with a finish at the low of the day. It’s still shy of the minor bounce high from two weeks ago at 1137, as well as 1157 and 1160 from mid-April. Support has been holding but today’s throwback decline shows it won’t be smooth sailing on the way back up – at least not yet.
DJIA – The DJIA painted a narrow-range bar today with light volume, but made a new high nonetheless. This is a breakout for now, although the strength we’re seeing is far from impressive here.
Notable Names:
LNG is on my radar as it continues to work on this bullish base. The ascending triangle pattern has been shaping up in recent weeks, but could still stand to tighten further before I’d consider it for a swing.
DO is another energy stock that is getting my attention here as it nears the apex of this falling wedge pattern. Today’s weak finish removed my interest in a trade for tomorrow, but I’m keeping it on watch as it could be ready to go soon.
LVLT is facing resistance here and a push through $44.55 could set it free for a quick pop. I like this one for a single-day play to participate in the initial breakout attempt if it happens, but with the broad market (and particularly the NAZ) not showing much momentum right now, that’s all I’m interested in.
FSLR has been slowly deteriorating for a few weeks now and tonight price is hugging a small rising trend line of support. A break below $62.30 could spark more selling and there’s several points of room for this one to slide before it would meet the former resistance area from late-Feb and early-March.
YELP has bounced within a downtrend here so I like this one for a single-day play on the short side if it breaks $55.20 tomorrow. Also note the declining upside volume of the past week.
TWTR had sold off hard and a bounce of some sort was in order, which has now happened. That’s not to say further strength will not be seen, but tonight price is looking tired as it hugs rising support. A break below $32.70 looks good to me for a single-day play on the short side as sellers emerge again and price attempts to test the recent low.
New Swing Trade Candidates:
No swings added tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
