Good evening StockBandits!
Last week the indexes broke key levels with weakness on Monday and early Tuesday, but from there we saw an oversold bounce kick in. Stocks reversed higher into Thursday, but volume backed off as the rebound progressed. Then the week ended with some Friday selling, taking the indexes right back to key levels as we headed into the weekend.
In the short term, the daily charts of the indexes show confirmed lower highs and lows since the beginning of the month, and the bounce we may have just completed could add to the list. That may, in turn, prompt more profit-taking on the part of the bulls if a test or breach of the May lows comes along.
Zooming out on the charts, this pullback could prove to simply be a dip within the longer-term trend. Only time will tell for sure, but as short-term traders, right now it certainly seems prudent to protect capital and wait for better momentum in the overall market before committing directionally to individual plays for anything longer than a few hours. Swing trading is best done with the proverbial wind at your back, which is a trending market. We’ve seen the indexes work their way slightly lower in recent weeks, but are clinging to support zones at the moment and still remain range-bound.
While we wait for better signals and momentum to reappear, my plan is to stick primarily with shortened timeframes for new trades. I also encountered quite a few sloppy charts of individual stocks, making it harder right now to locate setups for plays which have quality risk/reward profiles associated with them. We have Memorial Day next week, so it’s possible we see this range persist a little longer, and that means patience is still a virtue.
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: SSW, ALTR, IBB, ADS, VLO, EQT, KLIC, BVN, SINA, LVS
Swing Trading Candidates:
NONE TONIGHT
[table “49” not found /]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.
