Good evening StockBandits!
Last week, the indexes each pushed to new multi-year highs, confirming the higher-low scenario which has been outlined here multiple times in recent weeks. The rebound off the lows of the previous week was continued, and stocks strengthened to stretch their legs a bit. That puts some needed space between current prices and prior resistance, which could now serve as support on a pullback – when and if we happen to see one.
Currently, the market is a bit stretched in the near term, as evidenced by a streak of 8 consecutive gains for the NAZ as well as an unsustainable upside pace. Whether we see some actual profit-taking kick in to produce a pullback or we simply see prices stagnate for a few days to help digest this run remains unclear at this point. I’ve said previously, however, that there are likely some trapped shorts as well as plenty of underinvested bulls who are both likely to aggressively buy dips, and that could prevent the downside from gaining any real momentum – barring negative news, of course.
As I sifted through hundreds and hundreds of charts this weekend, I was impressed to see how well individual stocks are acting. A ton of them are exhibiting exceptional strength, with quite a few still building bases. That could not only keep us busy in the days ahead, but could also help to perpetuate this market rally as money rotates out of extended names and into others which are showing good potential. As usual, I’ll keep an eye on the earnings calendar in order to avoid any surprises, but otherwise the environment looks to be heating up.
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: YOKU, DANG, QIHU, GMLP, UAN, LULU, ADSK, DTG, VRX, SINA, SD, MRO, NTES, ROVI, TGT, WTI
Swing Trading Candidates:
WTI broke out ahead of earnings and then spiked much higher once the news was out last Tuesday. The final three days of the week saw a quiet pullback on much lighter volume, suggesting the buyers are simply resting. This has created a clean bull pennant pattern, and I’m on watch for higher prices. I’ll be a buyer if and when this one clears the upper trend line of the pennant with a push through $27.25. 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.
