Good evening StockBandits!
I mentioned Thursday night that despite a respectable 2-day rebound in the market, the next dip would have the potential to reveal some insights into the resolve of the bulls. We sure didn’t have to wait long to see it though, as it arrived on Friday with persistent weakness throughout the day.
A minor gap down never invited buyers into the picture, and instead stocks sold off into mid-morning. From there, we saw a feeble bounce attempt which never even approached the morning highs. Stocks then drifted back down to their lows to wrap up the week about 2% lower than where the previous week finished.
At this point, the big question is whether the market is creating a complex top or simply resting. We’ll have to see more technical evidence before we can embrace either side, as they both have valid arguments here depending on the timeframe in question. In the short term, bounces are getting sold, which is very different from the buy-all-dips action we saw so much of just a few short weeks ago. In the intermediate term, the uptrends are still intact, although the deeper this dip gets the harder it will be on the next rally to clear the recent highs.
I’m looking to trade both sides of the market as this indecision continues. We have earnings season coming into play, so it’s a good time to stress keeping an eye on the earnings calendar. Any swings I’m considering will of course need a little time to work, and of course I’ll be out prior to scheduled news.
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: AMZN, FDO, DFS, COH, MOS, AFFY, LGF, DECK, YNDX, GRMN, MGA
Swing Trading Candidates:
YNDX has been acting great despite market weakness. I’m watching the trend line for an upside break to indicate the start of another leg up. I’ll look to buy if this one clears $26.80. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
GRMN had been acting bullish but then stagnated and has since broken down. I’m now watching the small trend line for a downside break to trigger a short sale at $44.70. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
MGA just broke down from an ascending triangle pattern and the initial bounce attempt failed to reclaim it. This looks like a change of character for the stock, so I’m eyeing a short. I’ll look to enter if the trend line is broken to the downside at $45.20. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
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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.
