Good evening StockBandits!
The NAZ was facing a potential breakout heading into today’s session, but it failed to materialize as price was rejected from upper resistance. Each of the averages gave up some ground today, with the DJIA actually falling below its multi-week trading range to reach its lowest level since July 11. The others are still holding inside their ranges, and actually are of greater importance than the Dow. Nonetheless, it was another day where the bulls showed an unwillingness to put cash to work and seemed perfectly content to raise a little bit of cash.
Today we also saw narrow trading ranges once again, highlighting the lack of decisive price action that we’ve had so much of lately. The RUT, for example, saw only a 5-point trading range. That certainly doesn’t allow for much momentum, and really isolates the names which are on the move from the rest which can’t seem to get in gear. That sort of limited trending action in the indexes brings even greater importance to stock picking.
As of tonight, I’m sitting in a handful of swing positions, but I’m naturally hedged with some longs and shorts. When the market finally decides to exit the current trading range (and believe it or not, it will), I expect to be taken out of those trades on the ‘wrong’ side and find myself better positioned for a directional move. Until then, I’ll keep working the charts in search of clean setups and favorable risk/reward scenarios. Tonight I see no new swings to add to the list, although there are still a few which have not yet triggered that I’m still stalking. As for new plays, the only ones I see are momentum plays for Thursday’s session. Those can yield quick gains, as seen today with SCTY making a $2 move through the trigger highlighted here last night.
By the way, be sure to submit your tickers for review in this week’s Charts on Demand video if there are a couple of names you’d like me to take a look at.
Let’s get to the charts.
NAZ – The NAZ backed away from the highs today with a modest decline to end up a little closer to the center of its 70-point range. This index could exit the range in as little as a day because it’s not that wide, but as of yet lacks the momentum to do it. The wait continues!
SP500 – The S&P ended the day almost 9 points lower but still 14 points above the lower boundary of the trading range. That keeps the short-term trend lateral and reminds us to wait for a break before expecting a lasting move.
RUT – The RUT is moving laterally here and can’t get traction in either direction yet. This is a pretty narrow range, but so far no catalyst has arrived to produce an exit, so we are still stuck.
DJIA – The DJIA was the only index to do something of meaning today as it broke down out of the trading range it has spent so much time bound by (15400 – 15600) in recent weeks. Despite the break, the next step of importance will be follow through, and that may be difficult to come by unless the other indexes produce a break of their own.
Notable Names:
RHT is still sitting in the descending channel which began in the first half of 2012. This weekly chart shows that price has a chance at a breakout if it can clear the upper trend line near $54, but then it would need to create a higher high by clearing $55.60 where the previous bounce peaked.
GOOG is working lower here after resolving its ascending triangle to the downside. That negates the pattern as bullish, and now price is reaching new multi-week lows. It has been a bit obscured by the buzz in AAPL this week, but for a tech giant, this is not something to ignore.
CSX has pulled back and has a shot at turning back up here if it can clear the trend line at $25.50. I like it for a momentum play to participate in the initial pop if that level is cleared Thursday, but the last rally through a similar trend line only lasted 2 days so I’m not interested in a swing.
INCY was listed here last night but did not trigger today. The setup is still valid and I still like this one for a momentum play going into Thursday if it can clear $27.80 to participate in the initial breakout move.
WDAY spiked early this month but hasn’t done much since then other than move laterally to form this base. A new high at $75 sets up another pop, and I like it for a momentum play for Thursday if it can clear that level. Beneath $75 and I am not interested, as this stock has been known to churn for weeks (see late July).
FSLR is still looking vulnerable to a deeper decline so I’m relisting it tonight for a momentum play on the short side heading into Thursday. A new low at $38.50 could trigger more stops, and there’s ample room below for it to tumble even as a single-day play.
CAM is knocking on the door of support and one of these days it will get through. I like this one for a momentum short as it breaks $56.20 as there’s some room for it to head lower to test the $54 area from late December.
New Swing Trade Candidates:
No swing trades added tonight, sticking with the existing list.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
