Good evening StockBandits!
Summertime is here and today the bulls took a dip, perhaps not only in the pool but in the market as well. Stocks finally relented to break 5-day streaks in the NAZ and DJIA, cooling off their torrid pace while conjuring up images of the old “simma down now” SNL skit. Of course, the bulls didn’t entirely let go, as we did see a bounce in the final 100 minutes of the day which erased some of the decline. Given the opening gap to the downside this morning though, it was a fair showing by the bulls.
This is exactly the kind of scenario which the bulls want right now. The somewhat insignificant DJIA (only 30 stocks) grabs the headlines with a triple-digit loss, while the other averages see only minor declines. The buyers have exhibited a real persistence not only by way of frequent advances in recent weeks, but also by keeping the dips shallow. If becoming too extended is the worst-case scenario, and selling off hard to give up ground is the second-worst-case scenario, then the best-case scenario is a shallow dip and some lateral rest – just what we’re getting. (Side note: I promise not to use the word “scenario” again in this report!)
In working my watchlists tonight, the number of stocks on watch remains limited, but of those which made it, the list is lopsidedly bullish. This is just what I expect when in a market uptrend, but it serves as confirmation that the short side just isn’t offering much at the moment. Eventually that will change, but for now it’s still a matter of favoring longs even if keeping timeframes abbreviated due to the extended condition of the tape.
** Tomorrow I’ll have the Charts on Demand video, so if you have some tickers you’d like me to cover, send them my way. More importantly, if there are some specific questions related to trading or topics you’d like to see me discuss, send those too. I want to mix it up a little this week in hopes of providing you with as much help as possible.
Let’s get to the charts.
NAZ – The NAZ has respected essentially the same range for the past 3 sessions, just basing beneath 4344. Tonight it finished 40 points beneath the spring high of 4371, no doubt the next big number to watch if and when strength returns. For now, it’s resting and that’s a very positive way to digest the recent lift.
SP500 – The S&P backed off a few points today and filled the gap to 1940 listed here last night. It’s 12 points off the high it set on Monday, but this minor dip has so far occurred on light volume. Although more basing would be ideal, what we’ve seen so far is certainly a positive way to rest.
RUT – The RUT cleared 1160 last Friday and then pulled back to test it today, holding above that level. This was not a highly important test, but it was successful. The bulls have carved out one higher low already, and the current minor dip could create another. The gap to 1153 remains unfilled.
DJIA – The DJIA gave up some ground today to finish 108 points above former resistance. That level may serve as support if reached on this pullback, so it’s still a zone to watch. Today’s slide saw light volume, indicating no ominous change of character as of yet.
Notable Names:
RKUS is on watch for me tonight as it perks up within a short-term consolidation zone. I’d like to see price get closer to the neckline of this inverse head and shoulders pattern, then aim to take it for a trade on the long side upon a new recovery high. That’s still .30 away, which isn’t out of reach, but I’d prefer to see it edge higher before busting out.
AMBA is challenging resistance here after carving out some higher lows in recent weeks. A push through $27.10 looks good to me for a single-day play on the long side with room up to the prior high around $28.40.
DWRE is basing after an initial lift from the low. The recovery process could continue here any day now, but price needs to clear the trend line first. I like this one for a single-day play on the long side if price tags $62.30. It’s not a very tight base and upside volume has been far from impressive in the past several days, so I’m not interested in a swing.
FEYE was listed here last night but it did not trigger today. The same pattern is intact so I’ll give it another shot tomorrow if it can clear $35.60 for a single-day play with room to fill the gap to $37.13.
YELP is basing after a long-term channel breakout and now a turn up through the trend line could spark more buying. I like it for a single-day play to participate in the initial move out of this base at $67.25.
CAMP was listed here last night but did not trigger today, and I still like the setup. I’ll grab it for a single-day play through $20.05 as price heads back toward the unfilled gap from April which begins at $21.57.
BBBY remains unable to maintain a bid as each bounce keeps getting sold. Support is well-defined and just beneath current prices, so I’ll grab this one for a single-day play on the short side if it breaks down through $60.20. Here again, a loose base carries less appeal to me for a swing, so I’ll aim to participate in the initial break if it happens.
New Swing Trade Candidates:
No new swing candidates tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
