Good evening StockBandits!
Last week ended with some fireworks as the always anticipated jobs report was quickly overshadowed by tapering talk which was then overshadowed by Putin’s comments on Syria. Early strength got sold with a gap fill in the opening few minutes and a rapid retreat deep into the red. Worry prompted traders to pull the usual “sell now and ask questions later” routine, but by 10am ET a bounce arrived which soon became an all-out reversal back up. Just as quickly as stocks sold off, they recovered and made new session highs in the afternoon. Some late selling left the indexes right where they had finished on Thursday, making for a long road to nowhere ahead of the weekend.
Needless to say, from a headline risk standpoint there is no shortage of market-moving potential out there. It is important to remember as traders that the technical perspective is the one we need to stay focused on just in case those headlines get quiet. In addition, when it comes to the charts, there’s still ample overhead to deal with that could prevent smooth sailing to the upside for the bulls. The picture as it’s currently painted is slightly mixed, as the NAZ isn’t nearly as far from its highs as the others. However, each index is beneath former levels which traders will not be quick to ignore.
This week, the early focus will be on Obama’s evening address to the nation on Tuesday regarding Syria, and later in the week we could see the focus shift to econ again. This is a time to stay on our toes and remain nimble. The charts currently point to a market that’s struggling to rally, although that could quickly change and we’ll need to adapt as traders if it does.
Tonight there is very little to show as many charts are simply seeing short-term indecision. As such, I’m not looking to force anything and the handful of names on my radar for Monday are each for single-day plays only. I’ll add new swing candidates as high-quality setups surface with well-defined entries, exits, and favorable risk/reward profiles tied to them.
Let’s get to the charts.
NAZ – The NAZ is just 1% from breakout territory, but in the short term still has some lower highs in place and remains caught in a range. Last week it rallied but not with a lot of conviction as we saw weak finishes on Tuesday, Thursday, and Friday. Additionally, the other indexes are not as near to a breakout as this one, which could make for a bit tougher sledding for the bulls. If resistance holds, obviously the short-term path of least resistance will be down toward support.
SP500 – The S&P also rallied last week but Wednesday was really the only strong day it posted. It still sits shy of 1671, which was support in July and became resistance in August. However, it has a little breathing room down to 1627 short-term support.
RUT – The RUT is still respecting 1036 for now as we saw it get within 2 points of it on Friday and then pullback 5. The two levels to watch here at 1036 for continued strength, with support down to 1008 from the May high.
DJIA – The DJIA has been unable to reclaim 15000 but has lifted slightly from 14760 support. The lower high scenario is still intact for now, leaving this index looking like the weakest link. Should we happen to see near-term support broken, the June low from 14551 is the next level to watch.
Notable Names:
QCOR is at the apex of this falling wedge and if it resolves higher, could catch a bid. I like this setup for a quick play on the long side for Monday if it clears the upper trend line at $67.80.
CSOD is trying to break above the small descending trend line here but I’d like to see some follow through to Friday’s advance. If it can clear $53.25, it looks good for a single-day play to participate in the initial turn higher from this recent pullback. I like the volume expansion which accompanied Friday’s bar.
YRCW is near rising support tonight and a break below $17 could trigger some stops and begin a new leg lower. This wedge looks tight but it really isn’t, as the upper trend line is at $19. That’s too much room for a swing, so if it breaks $17 on Monday I’ll just grab it for a single-day play to participate in the initial break.
TIF has been weak lately and has found some short-term support. It isn’t lifting, however, making it vulnerable to another breakdown. If it undercuts $76 on Monday, I like it for a single-day play on the short side as it heads lower in search of buyers.
UAL is bouncing here but price has returned to a recent congestion zone and volume isn’t confirming the move in price. A break of rising support at $29.10 could trigger more selling, so I like it for a momentum play on Monday if that occurs.
New Swing Trade Candidates:
No new swing candidates tonight, sticking with existing trades for Monday’s session.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
