Good evening StockBandits!
Hope you’re enjoying a nice Memorial Day weekend, we sure have much to be thankful for considering the freedoms we enjoy and those who made the ultimate sacrifice for it. If you are active military, retired military, or a reserve, you are appreciated! Thank you for doing what you do!
Turning to the market, last week we saw pre-holiday trading volume taper off as expected, but that just made it easier for the bulls. Gains were seen across the board, including Friday’s session where the major averages added to the advances which started earlier in the week. The stage is now set for a big faceoff in the holiday-shortened week ahead with the NAZ right at the big 4185 level and the S&P within 2 points of an all-time high.
It’s important to remember right now that just because the holiday is over, it doesn’t automatically bring in big volume tomorrow. That’s possible, but unlikely. It’s a short week and that makes it a good time for vacations, which means that many have their attention elsewhere.
My watchlists are still pretty sparse, which tells me it’s not a time to be forcing new positions. In addition, the bases I do see still need considerable work and are in need of tighter price action. There are some setups worth taking here, but in what has been a fickle market lacking follow through, my intent will be to grab them for single-day plays rather than to stick around or build multi-day positions.
The hit-and-run approach not only allows for participation if a move develops in these stocks, but also allows me to keep my risk in check in case we see continued choppiness in the price action like we’ve had so much of lately. To put it another way, this is a time to stay nimble!
I will not have an evening report on Tuesday due to travel, but will be back in the routine on Wednesday.
Let’s get to the charts.
NAZ – The NAZ tacked on 95 points last week, but volume stayed quiet. Price closed right at 4185 on Friday, so we’ll see whether or not a breakout is able to happen after this 5-for-6 effort by the bulls in the past several sessions. If so, there’s room up to the prior bounce high of 4286. It’s been a reversal-prone tape though, so we need to see a change happen before we can expect anything different.
SP500 – The S&P added 22 last week and closed above 1900 for the first time ever. The intraday high of 1902 is within spitting distance from here, so the bulls have a big opportunity here just 2 weeks after it first tagged this level. Volume has been quiet, which is likely holiday-related, but it could play a big technical role if it returns this week.
RUT – The RUT bounced 23 points last week for a quick 2% lift, giving it some breathing room between current prices and major support which it approached just 7 sessions ago. Lower highs are still a big issue for this index, although that could change with a push through 1137 – now just 11 points away.
DJIA – The DJIA has on several occasions cleared the December high of 16588, although none have been able to stick. On Friday, it did so again, giving it yet another opportunity to head higher out of this multi-month trading range. The intraday high is at 16735, which is now the next level to watch if we see upside continuation.
Notable Names:
ALNY is facing multi-week resistance and a push through $59.80 would constitute a low-level breakout for this former high-flyer. This biotech is volatile, and this base is loose, so I’m only interested in a single-day play if this one breaks out on Tuesday. If it does though, there is plenty of room for a quick lift.
CAR is trying to break out of this high channel pattern but upside volume proved problematic last week. I like this setup but will only be taking it for a single-day play if it can clear $56.65 as the lack of volume and what has been a choppy market just doesn’t bode well for immediate follow through. That could certainly change, but for Tuesday I’m just looking to take this for a one-day play.
LNG is still on my radar as it nears the apex of this very large ascending triangle pattern. A breakout to a new high at $59.55 looks good to me for a single-day play on the long side, but a swing stop is still too wide. This one may need another few days before it goes, but I am setting it up anyway as it could spark a nice move if it happens to clear the hurdle.
FCX is attempting to stabilize here after a short-term dip and now price is just beneath a descending trend line. A turn up through $34.65 looks good to me for a single-day play on the long side as price starts another leg up in the trend.
CSIQ is starting to roll back over after a bounce back to former support (now resistance). Any continuation to the downside looks good to me for a single-day play on the short side below $23.65 for Tuesday. The declining volume on the 3-day lift adds to the look of a failed bounce.
New Swing Trade Candidates:
No new swing candidates tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
