Good evening StockBandits!
The major averages posted gains today to kick off the pre-holiday week by lifting from their respective lows from last week. The S&P 500 was able to push past 1883 again, making it the only notable technical event of the day as it kept the dream alive for a breakout. The upside was best in the NAZ and RUT though, as they lifted within their ranges. With each day that they hold above the recent lows, the prospects improve a little bit for the bulls.
There seems to be no sense of urgency on the part of bulls in particular here, as apparently they feel like they’ll have an infinite number of opportunities to push through key resistance in the senior indexes. At the same time, perhaps they view the NAZ and RUT as being depressed and likely to turn the corner sooner than later. Of course, nothing in the market is a foregone conclusion, so it’s dangerous to only think that way when there are plenty of other scenarios which may unfold. Here, as much as ever, it’s important to keep an open mind for what may happen next, because anything is possible.
I am expecting to see volume taper off as the week progresses since we have a 3-day weekend coming up. Memorial Day generally coincides with the end of school and the start of summer, making it not just a big vacation weekend but the kickoff of vacation season for the next few months. That’s not to say that we won’t get some emotional moves on heavy volume this summer, but simply to make a note of the fact that the next week or two could be characterized by a lack of involvement, warranting smaller positions in the interim.
Let’s get to the charts.
NAZ – The NAZ finished strong on Friday and then did so again today with another solid advance. However, upside volume is tapering off, and price is still well shy of the key 4185 level. That could keep this index range-bound for now.
SP500 – The S&P edged past 1883 today by just two points to finish above key resistance. We’ve seen this occur several times in the last couple of months though, so it’s not as if suddenly something has changed and this breakout is set to stick. Follow through will be needed, along with some help from the other indexes.
RUT – The RUT tacked on 1% today on the heels of Friday’s bounce, creating a bit more space between current prices and major support down at 1079. The road to recovery may not be easy though, even if this low sticks, as there are nothing but lower highs from prior bounces going back to March. 1137 is the first short-term level to watch, followed by 1160.
DJIA – The DJIA has only lifted 65 points since Thursday’s close, which certainly isn’t much. That could easily be undone in a matter of minutes, but the Dow is again attempting to challenge key resistance. For tonight, it’s still range-bound.
Notable Names:
MGM is trying to stabilize here after a pullback and has a shot at carving out a higher low. I like the looks of this one for a single-day play on the long side if price is able to clear the trend line at $24.30.
YPF is at the descending trend line tonight and a push through may allow it to rally back toward the recent high. I like this one for a single-day play on the long side if price can clear $30.05. Upside volume is lacking, and this hasn’t been one to show upside follow through for many weeks now, which is why I’d prefer to just participate in the initial turn back up.
CAR is attempting to break out here and a new high at $56.50 looks good for a quick play. I like this one for a single-day trade to participate in an initial breakout if it happens.
ISIS has been annihilated since late-February and may be due for a little bit of a recovery. I’m not looking to keep it overnight though, as it’s a biotech stock and the trend is still down. However, there is a chance for a short-term higher low here so I’ll grab it for a single-day play on the long side if price can clear the trend line at $25.25.
SFM is still caught in a downtrend and this bounce from the recent low looks to have run its course. Price has stalled out in the past few sessions and now downside volume is again picking up. A break below $28.10 looks good to me for a single-day play on the short side as the selling kicks back in.
New Swing Trade Candidates:
No new swing candidates tonight, bases still need work and market is still giving mixed signals within the ranges.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
