Good evening StockBandits!
The buyers looked to be in gear this morning as an upside gap delivered additional strength to yesterday’s afternoon recovery. It didn’t last long though, as the sellers emerged once again and the morning gap was filled. We saw a steady series of lower highs and lower lows until the final hour when stocks merely stabilized, unable to rebound.
My intraday exit of the shorts I was carrying as swing trades was based on the late-day stability. I discuss the individual stocks in the Hit List post tonight, but want to mention my general reasons here. We’re in a market which has proven to be rather volatile of late, and reversals have arrived rather frequently. The S&P 500 has just declined 4% in 4 sessions, which could certainly be followed by more weakness, but after a move of that size I start looking out for signs of fatigue. So, in a reversal-prone market, my preference was to book the gains and stand aside, using the broad market weakness to my advantage by covering my shorts into a favorable move rather than stopping out on a bounce.
With this volatility, there are some setups out there, and that’s a good thing. Tonight in looking through a great number of stocks, I located a few potential plays in both directions, and which I’m eyeing for both day trades and swing trades. My aim in a market like this is to come up with plenty of if/then scenarios, and then let the market action dictate my moves.
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: GG, BVN, RDN, DO, EGO, WLP
Swing Trading Candidates:
EGO pulled back over the past few days within its uptrend, creating a well-defined trend line just overhead which I’ll be using as a pivot. I’ll be a buyer if the $17.45 level is cleared, as that could free up prices to move higher with all the recent strength.
WLP has bounced in a lazy fashion over the past 2 weeks, creating a rising wedge pattern. These are typically resolved to the downside, so I’m watching for a break of the lower rising trend line at $52.80 to trigger a short sale for me as a new leg lower begins.
Bullish Watch:
CSTR, SLW, ABX, EGO, GOLD, RGLD, PACR, PAAS, GG, BVN, CLDX, IPXL
Bearish Watch:
RDN, CAGC, CLF, LCAPA, CEPH, ROST, FAST, MCO, BP, RIG, DO, EL, RIMM, LYV, MBI, UAUA, CNW, WLP, ETH
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.
