Good evening StockBandits!
The major averages painted another green bar today, but the bulls again showed some restraint in their buying efforts. We’ve gotten lifts from the short-term pullback lows of last week, but so far the June highs are still intact. If we’re going to see new recovery highs made, it’s going to boil down to the bulls having enough desire to produce it. The bears sure don’t have much firepower here, but a rejection in this area could certainly spark some profit-taking.
In digging through the charts tonight, I was struck by how many stocks have seen nonstop strength for the past couple of weeks (or more), and I’m planning a post for tomorrow on that. But the takeaway is that the strength has been concentrated in many cases to the point that price is just greatly extended.
That doesn’t allow for the participation of continuation should it occur, at least not for those of us who care about risk. When a downside exit isn’t readily apparent on the chart, it’s most likely a setup which should be tabled until a new base or pattern is able to form. I’m still sticking with single-day setups heading into tomorrow as the indexes are still caught between their highs and pullback lows of June, and there just isn’t much to choose from at the moment.
Tomorrow we have the FOMC announcement and forecast at 2pm ET, followed by the press conference. That certainly could deliver some fireworks for this market, so stay on your toes and be prepared for some rips and dips just in case.
Let’s get to the charts.
NAZ – The NAZ tested the June high right on the number today but again finished below 4344. Volume improved a little today as this index marked its third straight advance after a test of support last week. Next we’ll need to see if the bulls can produce a short-term breakout, along with a new recovery high on the way to test 4371, the spring peak.
SP500 – The S&P edged higher today but didn’t see any acceleration on the descending trend line break. Price is now roughly 13 points shy of the peak, but volume may need to improve in order to see that high get taken out at 1955. Watch rising support for any downside change of character.
RUT – The RUT led the way today and rallied right back to test 1179 on the number, the June high set last week. After the successful test of support (former resistance), this index now has a shot at pushing toward 1193 and the other relative bounce highs from the spring. The first order of business will be clearing 1179 on a closing basis.
DJIA – The DJIA finished positive today but the advance was minor and volume diminished again. For now, it’s holding above 16735 (former resistance has become support), but doesn’t have a lot of breathing room on the downside. The high is at 16970 and is still the number to watch should we happen to see some improved strength.
Notable Names:
CLDX is churning here just beneath short-term resistance, basing on light volume after the recent rally. This is very healthy price action and it’s still on my list for a trade on the long side if it can make a new recovery high. It’s a biotech, so I’m only interested in a single-day play if it goes.
RKUS has been shaping up lately and just last week pushed out of an inverse head and shoulders pattern. The initial breakout hasn’t been met with momentum, but the door is still open for that. A new recovery high at $11.70 looks good to me for a continuation lift with room toward the April high. The risk/reward for this setup isn’t great, so I’ll grab it for a single-day play if it goes.
HALO is working on filling the gap from April and has rested in the past few days. A push through $10.40 looks likely to generate some interest as the recovery continues. This is another biotech so I’m only interested in participating in the initial move if it goes.
WFT was on my list earlier this week but pulled back yesterday. Today it bounced back and may now be poised for a trend line break. I like this one for a single-day play on the long side if price can clear $22.45 on Wednesday.
GPRE is perking up here on expanding volume and tonight it’s facing the April high. A breakout would interest me for a single-day play to participate in the initial move higher through this level, so I’ll grab it for a trade on the long side Wednesday if it can clear $32.70.
New Swing Trade Candidates:
No new swing candidates tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
