Good evening StockBandits!
Last week saw the major averages lifting on the heels of the previous week’s strong finish, but there was no follow through. Both the S&P 500 and DJIA reached new all-time highs, only to immediately give back ground with Wednesday-Thursday slides to fail their respective breakouts. Having closed above their key resistance zones once again, the stage was set for the bulls to press their edge if they wanted to, but once more they hesitated.
Granted, without accompanying breakouts in the NAZ and RUT, it’s a tough slog for the blue chips to make lasting upside progress. The more speculative indexes need to be involved and pull some weight by showing that the hot money is coming into the market, not staying sidelined. Instead, the latter description is the most fitting right now with no leadership to speak of among momentum names. One has to wonder if yet another failed breakout in the senior indexes goes down as a second strike against them.
All of this choppy back and forth price action has a way of raising frustration levels among market participants, as well as diminishing the desire to be involved. When stocks can’t make any meaningful headway, the game becomes more tricky, making speed of entry and exit all the more important before yet another whipsaw move occurs. There’s been no shortage of media coverage on the individual investor’s inability to compete on speed, so to see reduced volume of late is not surprising. We’re also coming into summertime when many turn their attention elsewhere with vacations, so although we’ve not seen a huge “sell in May” effect so far, the “and go away” portion of the axiom is showing some merit.
The charts remain sloppy and bases are generally wide and somewhat loose due to the overall price action out there, which doesn’t leave a lot worth trading at the moment. That’s the case a number of times throughout the year, and the key is to continue to take what the market is offering, which are quick flip trades. That’s where my focus will be in tomorrow’s session.
Let’s get to the charts.
NAZ – The NAZ ended the week with a gain, but no overall progress. By that, I mean it’s still range-bound here and still a considerable distance (95 points) from key resistance at 4185. The last few dips have created incrementally higher lows, and price is turning up here, but there’s no compelling case for lasting strength in this index until it can get over the hurdle of resistance.
SP500 – The S&P finished the week flat with only a fractional net change. That’s a little funny considering the range of movement we saw, but when no moves are able to last, we end up in about the same place. The biggest development was the new high it established at 1902 and the abrupt failure on yet another attempt to clear 1883. It’s still not far from there, but the enthusiasm of the bulls seems to be fading fast.
RUT – The RUT ended the week lower by a few points, but was really all over the map. The bounce carried nearly to 1137, but stopped short to create yet another lower high. We then saw a new correction low made on Thursday before a lift into Friday’s close. The small caps continue to struggle and have yet to turn a technical corner. Key support is at 1079.
DJIA – The DJIA made a new all-time high on Tuesday, only to fall right back beneath the resistance level which has been in place since last December by the end of the week. This is a case of an index having everything it needs to head higher, except buyers.
Notable Names:
ALNY is basing here after a short-term higher low and may be poised for a continued recovery. I like this one for a single-day play on the long side if price can clear the trend line at $57.65. The correction here was deep so this base isn’t quite as tight as it may look on this zoomed-out chart. In addition, it’s a biotech stock (very gap-prone sector) so I’m just not feeling it for a swing.
NRG is trying to stabilize after a pullback here and now needs to clear the trend line at $34.05 to get going again. This one could bounce back toward the recent high if it’s able to make the break, so I like it for a single-day play.
TWTR is still looking vulnerable to a pullback to fill a gap to $29.51 or test the low. I like this one for a single-day momentum play on the short side if it breaks $31.90 to show some continuation to last week’s decline.
NTAP is sitting in a wide, low-level base here and looks about ready to continue its downtrend with Friday’s poor finish with distribution volume. This setup is too loose for a swing, but I would be interested in a single-day breakdown play through $33.20 for a short sale.
UBNT is stalling out here after a bounce from a new low, and upside volume is falling off the table. A break below rising support at $33.80 looks good to me for a single-day play on the short side.
CAMP is also hugging rising support after bouncing from a fresh new low. A break below $16.80 looks good for a single-day play on the short side as price starts to head south again.
New Swing Trade Candidates:
No new swing candidates tonight, still waiting for better setups to surface in this choppy market environment.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
