Good evening StockBandits!
With a major holiday just 2 days away, traders seemed a bit distracted today. The market has enjoyed a big lift from the lows of last week, but with volume tapering off and the expectations of sizeable moves for the remainder of the week diminishing, stocks couldn’t make much of a move today when it was all said and done. The highs were set in the first half of the day and the lows in the second half, which isn’t unlike what we’ve seen of late. Ultimately though, we ended not far from last night’s closing levels.
Tomorrow is a half session for the market with the closing bell set to ring at 1pm ET. My plan is to do very little, because as we saw today, the moves in this kind of environment tend to be short-lived. I’m not counting on much for the rest of the week actually. There’s no sense in overanalyzing ahead of holiday trading, nor is there much to do in the way of activity. I outlined last night my case for the health of the current bounce, and today it stalled. With a short session Wednesday and a bit of an island trading day Friday (all alone between 1 1/2 days off and the weekend), I just have no interest in putting on much new exposure.
I’m keeping it intentionally brief tonight as I expect to largely spectate tomorrow morning rather than speculate. There is no Charts on Demand for this week due to the holiday. I’ll cover some charts of interest and then see you back here over the weekend.
Let’s get to the charts.
NAZ – The NAZ got 1 point from Monday’s high but couldn’t clear it. This index then slid 20 points to finish nearly flat. The consistency with which we’re seeing afternoon weakness cannot be ignored here, and until it’s cleared, we have a bounce high now in place at 3454.
SP500 – The S&P couldn’t clear 1626 today and ended the session 10 points off its high. Here again, we have a bounce high to watch closely at 1626 until it’s cleared. Volume should be extremely light for the remainder of the week, making it difficult to place much emphasis on the moves unless we see something major.
Notable Names:
PSX is getting closer to a key level from April for a test. The ideal setup would be for price to pause at that level and rest for a few days before breaking down. Either way, this stock is still correcting and the last bounce from late June has now been completely erased. I’m keeping this on the radar.
EA has reached the upper end of its trading range or channel here after a 10% rally over the past 6 sessions. That leaves price a bit short-term stretched and in need of a rest. A pause would benefit the bulls here, as a breakout which comes with a price extension opens the door for failure due to normal profit-taking. I’m leaving this on watch for now.
Z is holding up well with some quiet higher lows in recent weeks. A turn up through the small trend line at $57.90 would set up a quick momentum play on the long side for Wednesday, although this base isn’t high enough quality for me to take it overnight as a swing.
CSOD was listed here last night and is still looking good after another small gain. A breakout from this descending channel at $44.80 sets up a momentum play on the long side for Wednesday, but I don’t like this setup enough to take it for a swing yet.
VMW is nearing short-term support and is already in a downtrend. A break below $64.70 could spark some short-term selling, so I like it for a momentum short on Wednesday. A swing stop is a bit farther than I’m comfortable with for now but another day or two of basing could tighten it up for a possible play next week.
FFIV is hugging rising support and today saw another weak finish. A break of $68.60 could trigger more selling, so I like this setup for a momentum short on Wednesday if it undercuts rising support.
New Swing Trade Candidates:
No new swing candidates tonight ahead of the holiday due to expected light volume and very little follow through.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
