Good evening StockBandits!
This morning we saw early weakness quickly erased as stocks were bid back up. The indexes climbed to their best levels in several weeks (including another 52-week high for the NAZ), but gave back the bulk of their gains with some afternoon selling.
What’s so interesting is that the action this morning may have been the work of bears who have needed to cover short positions on any weakness, while the afternoon selling may have been the work of the bulls who sense an opportunity to sell into strength. This ‘turnover’ type of action may also have contributed to today’s increased volume, as well as the insignificant net changes we saw on a closing basis.
Nonetheless, the indexes continue to show strength, and that can’t be ignored. While we do need to respect the price action, tonight it’s tough to find low-risk buys out there. After all, I have to wonder why a stock hasn’t participated in a rally of this degree if it truly is bullish. As a result, the majority of the plays I’m looking at for Wednesday are on the short side. That doesn’t make me bearish – just an opportunistic trader who sees better risk/reward profiles on that side of the tape – in the ultra near term anyway.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: VRX, ANW, BYI, QCOM, SPWRA, RAX
Swing Trading Candidates:
RAX bounced nicely from its February low, but in recent weeks it has been unable to build on that strength. It has instead lagged the overall market, and now is resting just above short-term support. A break of the $18.90 level could set this stock free to head back down toward its lows, so I’ll be looking to initiate a short position if that break takes place.
Bullish Watch:
VOLC, MTB, SWK, LEA, DPZ, VRX, SWK, MU, LZB, TSRA
Bearish Watch:
FCN, ANW, RAX, FSLR, UNT, RIG, AU, BYI, QCOM, DNB, SPWRA
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
