Good evening StockBandits!
The major averages tested both the upper and lower portions of their respective short-term trading ranges last week with early strength, some mid-week selling, and a strong finish. The ongoing fixation on Europe produced sizeable moves in both directions, but overall the week left the indexes mixed and little-changed from the prior week’s closing levels.
Despite the market generally in churning mode over the past several weeks, there are some positives…
For starters, we’ve found a higher range. The August-September range was broad and volatile, yet in recent weeks we’ve held the rally from the October lows by way of this rest phase. That’s giving the market some short-term support, which adds concern for bears while giving dip-buyers added confidence. We could easily build on that into the end of the year, particularly with positive seasonality and underperformance anxiety.
Additionally, individual stocks are establishing some more positive patterns with rallies being followed by building bases. That’s in keeping with what the overall market is doing, but it gives us greater variety in terms of tradable patterns with flags, pennants, wedges, and pullback plays beginning to set up. As the potential grows that a higher low is being carved out, it brings with it some young uptrends, which means we could see some excellent opportunities developing in the weeks and months ahead.
So, a higher market doesn’t necessarily mean a better market for traders, but in this case, it’s bringing with it more setups, which is something that’s been severely lacking since late-July. I’m encouraged by that, and it should only improve once the frequent, big overnight gaps subside.
I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
Video Stocks Discussed: APA, TS, HAL, OPEN, CSTR, ATI, WLL
Swing Trading Candidates:
ATI has held up nicely of late while putting in some healthy rest. This stock could begin another leg higher any day now, so I’ll be watching for a push through $50.60 to mark a new recovery high, which will be my trigger for a buy. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
WLL pulled back quietly from its recent high to digest the prior run. It now sits poised for another push higher if it can first clear the trend line. I’ll be using $49.50 as my trigger to get long. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.
