Good evening StockBandits!
The indexes spent considerable time in negative territory today, hitting new pullback lows in the process. However, intraday we saw a slow recovery take hold, and by the closing bell 3 of the 4 indexes (NAZ was the lone exception) reversed to finish positive on the day.
We’ve been watching this pullback run its course lately, and as a result I’ve stayed mostly sidelined with the exception of day trades and one open swing trade. Selectivity has allowed me to avoid the noise, and I’ve been waiting for the market to give some kind of a signal directionally. With a good shot at selling off hard, the market has proven resilient, and this has so far been a healthy digestion of the rally off the March lows.
We have yet to see if upside continuation is going to occur, but today’s bars on the daily charts of the indexes show some potential for a bounce in the short term, so tonight I’m primarily looking at the long side when it comes to new plays for Friday. That’s not a directional bias, as I’m open to whatever this market happens to do, but simply an observation that perhaps the pullback has run its course. Stated otherwise, technically it looks like there’s a chance to head higher from here, so let’s see if the buyers want it badly enough.
The key at this point is not just rushing out to buy stocks in hopes that the market provides a lift. Rather, it’s imperative to identify pivots on the charts, which if crossed would indicate that the buyers are back in gear. I cannot stress enough the importance of keeping stops in place and waiting for signals to occur, because if a rally is going to unfold, it isn’t necessary to catch the first few ticks of it.
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: TEX, BTU, CAT, LEA, ROK
Swing Trading Candidates:
ROK recently cleared prior highs to reach new multi-year highs, and has since pulled back. On this dip, previous resistance is now serving as support, and this one may look to head higher from here. I’ll be going long if the descending trend line gets cleared at $92.65, setting a stop just below this week’s lows in case this stock triggers and then reverses. 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.
