Good evening StockBandits!
Stocks headed higher right out of the gate this morning, but for 3 out of 4 indexes, the best levels of the day were seen early in the session. Despite late-day bounces, only the DJIA was able to eclipse its morning high. We saw a discrepancy between the blue chips and the small caps, as the DJIA and S&P both held their gains quite well, while the NAZ and RUT each barely finished in the green.
In looking through many charts tonight, I saw quite a few stocks which appear to be in danger of creating short-term lower highs if these bounces fizzle out. That’s a result of the sharp pullback we saw last week, but also due to the pace of this bounce losing steam rapidly in many stocks. If we should happen to see a little selling in the next day or two, it could quite easily lead to another slide. And at the risk of stacking up “ifs,” should we see a turn lower from here, it could bring about a bigger shift in the prevailing mood of this market as we’d have a bounce getting sold for the first time in a while rather than simply another dip getting bought.
Another bar or two will do wonders for many stocks which are attempting to create new patterns, but as of tonight there simply aren’t a lot of mature setups yet. The swift move lower early last week and then a few days of strength has left quite a few stocks with V-shaped rebounds, so a bit of basing would be ideal. Regardless of which way we go, the market is acting more lively at this point, and that’s very good for us as traders.
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!
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Video Stocks Discussed: CVX, IO, FDX, JNPR, TIF, AA
Swing Trading Candidates:
AA recently failed its breakout after making new highs, and rolled over sharply. Over the past few sessions, it has bounced back slightly, but volume has diminished and this chart may soon have a lower high. I’m watching the rising wedge pattern for a possible confirmation, which would take place with a break of the lower rising trend line at $16.60. I’ll go short if that break occurs, and will be looking for a second leg lower to begin. As with all swing trades, my stop and target levels for this trade are found on the Hit List here inside the Hideout.
Bullish Watch:
CVX, XOM, IMO, CNQ, RES, IO, DVN, MOBI, TLM, COP, SGI
Bearish Watch:
X, MAN, DE, EXPD, SVVS, SINA, CMI, DLB, AA, TEX, HSC, BIDU, CCL, SCCO, FDX, GR, JNPR
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.
