Good evening StockBandits!
Futures were deep underwater during the night last night, but with news of the ECB cutting rates, the tide shifted and we saw a big upside reversal. That produced another big gap on the open to the upside, but it didn’t last long. Apparently spooked by the weakness of the past few days, traders used the early strength to sell into, and in half an hour the gap had been filled.
From there, we saw another reversal to the upside with a steady trend higher into the close, taking out the morning highs and leaving the indexes each up about 2%. Today’s action, while somewhat erratic, was constructive. We saw the bulls buy another dip, and we also saw Tuesday’s gap get filled on the daily charts.
It’s still a headline-driven market right now, but the technicals have improved and it’s still looking like there’s a fair chance that this pullback results in a higher low vs. the October low. While we wait, we’ll trade what the market’s offering, and tonight those are bullish setups. I even have a couple of swing candidates on my list, although I’m wading back into those waters slowly and selectively given the recent price action.
Be sure to check out the post from earlier today on 4 Traits of the Perfect Trader. It’s an important reminder of some of the things it takes to succeed in trading, and I think it’ll help you.
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: VHC, FSLR, ADTN, ESRX
Swing Trading Candidates:
ADTN has been basing above former resistance which is now serving as support. I’ve had this one on the list for a day trade this week but it hasn’t triggered, spending more time basing instead. That allowed this pattern to mature, so now I’m watching for a breakout at $34 to buy for a swing. Earnings have already been announced for Q3. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
ESRX pulled back over the past few days but has closed in the same area the past 3 sessions, indicating it is attempting to stabilize. This is a healthy pullback after a big advance, and now it has a bull pennant pattern which may be ripe for another move higher. I’ll be a buyer for a swing trade if this one clears the upper trend line at $44.65. Earnings have already been announced for Q3. 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.
