Good evening StockBandits!
The NAZ was able to make a new high today, but was unable to inspire the others to join it. By the end of the day, it had fallen back inside its 3-week channel and the net changes across the board were minimal and mixed. It only takes a spark to ignite a fire, but this market just can’t seem to get one. As a result, we’re still stuck in hurry-up-and-wait mode, bound by narrow short-term trading ranges.
When this happens, there are of course both pros and cons. An advantage of a rest phase like this is that it allows new bases to form and helps to establish some short-term levels to utilize as breakout zones in case they get cleared. The downside is that until the range is left behind, follow through and momentum are fleeting and it requires a lot of patience. It’s easy to overtrade in this type of environment, as each tick looks like it just *might* be the start of a meaningful move. Do your best to avoid that right now.
I added some swing exposure today as per last night’s selections, and am sticking with existing plays on the swing grid for tomorrow. Aside from that, I’m eyeing a few momentum setups which could generate some cash flow. To become real aggressive, we need to see not just a single index break out, but each of them. When the market moves in unison, the moves tend to become much more reliable.
Let’s get to the charts.
NAZ – The NAZ cleared the prior high by about 5 points today, then gave up 13 from there to finish the day back inside the channel. Volume picked up, but without the help of the S&P and RUT, upside follow through will be harder to come by.
SP500 – The S&P got to within 5 points of its high today but then backed off 8 into the close, finishing nearly unchanged from Monday’s closing level. This channel is well-defined, and we need to see an exit from it before expecting anything other than drifty price action.
RUT – The RUT keeps holding above 1036, although it’s not far away. This index has a rounded top look to it, but it’s difficult to act on that when short-term support keeps holding. I’m not ruling out another upside run, but there is a shot at some downside if 1036 is broken.
Notable Names:
AET is holding inside its uptrend channel here after another test today. It may simply be a matter of time before the pace of the rally stalls out and price undercuts the channel if these more frequent tests are any indication. This tends to be a slow moving stock, but provides a nice example here of how to evaluate the price action with a clean uptrend channel.
GOOG is still near rising support but it held it today and now has some room to lift within this large ascending triangle. I don’t see a play for this one unless it exits this large base.
VIPS is attempting to rest here and build a pennant, as per the dashed lines on this chart. I like how it maintained momentum for a few weeks ahead of this base, so if the pattern can tighten it could set up a nice opportunity for a swing soon.
WDAY is coiling just beneath key resistance here. It has been lively on any given day, so a breakout could produce a nice pop. I like it for a momentum play above $69.80, although it doesn’t look like a great swing given the hesitation it has shown in months past to trend in a clean fashion.
FLIR is sitting just beneath its highs after a big run last week, and may not pause for long. A turn up through $32.85 sets up a momentum play for Wed. as new highs are made. This base isn’t yet mature enough for a swing, so I won’t be holding it overnight.
INFI is trying to recover a bit here and has some room to run toward an unfilled gap from June. A new recovery high at $21.10 looks good for a momentum play on Wed. as bulls gain more hope and shorts get squeezed.
CDE is just beneath a small trend line that could serve as a pivot for higher prices. It doesn’t have a lot of room to run, so I like it for a momentum play on Wed. if it can clear $13.70.
ABX was listed here last night but didn’t quite trigger today. It still looks good for a momentum short and I’ll take it on Wednesday if it breaks $17.10.
SCCO just sold off quickly and is now just above support. A break below $26.45 sets up a momentum play for Wednesday, although there’s no readily apparent swing stop so I’m only interested in participating in the initial breakdown as stops get run.
New Swing Trade Candidates:
There are no new swing candidates tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
