Good evening StockBandits!
The major averages added to their recent gains today after an indecisive morning to hit new multi-year highs by the closing bell. All eyes were on the FOMC announcement which came earlier than usual (see correction in last night’s Broadcast & comments), and then the news conference with Fed Chair Bernanke. The response was a positive one, however, as the buying resumed once the dust settled and more cash was put to work late in the session.
At this point, the buyers clearly have momentum, and I’m not interested in trying to fade it. Momentum is something which can last longer than many expect in the market, so we could continue higher over the next few sessions. With that said, we are at a point where the pace of this run is getting unsustainable, and therefore it’s important to start watching for potential signs of short-term fatigue. That could come by way of an upside gap which prompts profit-taking, but regardless of how it arrives we ought to be on watch for some sort of a rest. It doesn’t have to be a sharp pullback either, as trapped shorts and anxious bulls are both likely to keep a bid beneath this market.
My plan is to continue trading the long side, while favoring pullback types of setups for new swings. Momentum plays and breakouts at this point should be best utilized for intraday trades, so I’ll use shortened timeframes for those.
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: WFT, NVDA, HMIN, CIEN, GLNG, LVS, SCCO, PWRD
Swing Trading Candidates:
PWRD ran higher a couple of weeks ago and has since pulled back and held above the prior breakout. The pullback has created a descending trend line which I’m watching for a pivot to get long this stock. I like how volume has contracted along with price, indicating this dip isn’t a change of character. I’ll be a buyer if this one clears $26.60 for a swing trade, and earnings are still about 3 weeks from now according to Yahoo Finance. 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.
