Good evening StockBandits!
With yet another chance to break out from their respective ranges, the S&P 500 and DJIA each shied away today from resistance. There was no attempt made at the upside, as right out of the gate we saw steady selling pressure which lasted into the afternoon. There was a modest lift late in the day, but it could only erase a small portion of the day’s decline. We’ve seen this same behavior over and over the past few months as the bulls just don’t seem all that intent on getting it done in the senior indexes.
Meanwhile, the NAZ and RUT continued their risk-off behavior as well with the latter finishing within 5 points of its lowest close since early November. It’s looking like it is dying to test or break the 1079 support level, in which case it would be yet another signal that the speculative money is exiting the market for now.
The charts remain sloppy out there, which is just par for the course when the broad market is range-bound like it is. When the indexes can’t show follow through, it’s much harder to come by in individual names as well. I’m sticking with single-day plays for tomorrow’s session, as that’s currently the best way to participate in moves while keeping risk of reversal at a minimum.
Tomorrow we have Fed Chairwoman Yellen speaking (11:30 am ET) and then FOMC minutes (2pm ET), both of which could prove to be market-movers.
Let’s get to the charts.
NAZ – The NAZ sold off today, just like it did after the previous 2-day bounce last week. It can’t seem to get anything going here and still has ample room on both the upside and downside before a meaningful break would occur. This is a choppy range if I’ve ever seen one!
SP500 – The S&P just can’t keep from slipping back beneath 1883, and one of these days we’ll either see a breakout which actually sticks or a hard rejection selloff away from this level. We’re still waiting for that day though, and until then we have 1883 resistance and 1850 support to keep us occupied.
RUT – The RUT looks like it just made yet another lower high on the 2-day bounce and subsequent selloff today. This index led the way lower and now has just 18 points on the downside before it’ll be facing a very key support level. Given all the lower highs, the prospects aren’t looking good at the moment for that level to hold, either.
DJIA – The DJIA easily erased the 2-day lift of 65 points with a decline today of twice that magnitude. It’s trying to work lower within the range, and has some room. Indecision remains the key emotion right now though, so it’s certainly a fickle market.
Notable Names:
NRG is again looking like it could pop after a modest gain today to bring price back within reach of the descending trend line. A push through $33.90 looks good to me for a single-day play on the long side as price turns back up to head toward the recent high.
WUBA is sitting in a low-level base here but just held support from last month. A turn up through $40.10 would free it up for a quick rally, so I like it for a single-day play on the long side if it can clear the hurdle. There’s an unfilled gap a couple points higher from 2 weeks ago to $42.74 that price may gravitate toward.
CODE is coiling here beneath the descending trend line and a push through $18.10 looks good to me for a single-day trade on the long side. There’s some room to head back and test the recent high, but I’m just not expecting lasting follow through here given all the choppiness of the past two months in this stock.
LULU is starting to break a rising trend line here and I like it for a continuation play for tomorrow’s session if it breaks $44.20. The recent low is about $2 lower, which is certainly within reach for this stock. I don’t like the risk/reward here for a swing though, so I’ll just look to grab it for a one-day move if it goes.
FSL is at key short-term support here and a breakdown could trigger another wave of selling as price further retraces the rally from earlier this year. I like it for a single-day play on the short side upon a break below $20.75, but a swing stop would belong above this 3-week base and that’s a bit too wide for my taste given all the indecision in this market right now.
New Swing Trade Candidates:
No new swing candidates tonight, broad market remains range-bound and follow through is elusive.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
