Good evening StockBandits!
Having stalled out after an early bounce last week, the market resumed its rebound today with solid advances across the board. We saw early strength, mid-day weakness, and then an afternoon lift which left the indexes off their best levels of the day but still deep in the green.
Technically, the RUT was the only index to reclaim an important level today (772), while the NAZ and S&P 500 each challenged their respective resistance levels without success. The question of the day is whether or not this bounce can be trusted, and to that I will defer to the charts for a pair of clues. The first is that we’ve yet to get back over former support zones (currently resistance), making it difficult to embrace the prospects for a lasting rally from here. The second is that today’s upside volume was well above Friday’s pre-holiday volume, but still well below average, making today’s advance a bit narrower than the bulls would prefer.
My plan at this stage is to maintain an open mind while staying selective. I suspect that will include plays on both the long and short sides of the market for as long as we are seeing indecision by way of the short-term trading range.
I’ll run through a few of the indexes here and then share some new plays I’m eyeing.
NAZ – The NAZ challenged 2887 today but has yet to clear it. This index posted a gain but finished off its intraday high, leaving it short-term range-bound.
SP500 – The S&P also challenged a meaningful level today at 1335, topping out just a fraction of a point beneath that level. Today’s 1% gain was nice, but for the moment this index remains beneath former support, making it difficult to embrace the bullish side until that changes.
RUT – The RUT was able to clear 772 today, making 784 the next level to keep an eye on if we see additional strength. However, this index will likely need some assistance from the others if it is to continue recovering.
Charts of Interest:
Below are some charts of interest, from market leaders to example charts:
FB remains a focal point right now as a barometer of interest from the casual investor given all the recent attention. Last night I pointed out the $31 area as short-term support with a bear flag pattern, and today we saw a very clean breakdown in the stock which offered some easy gains for active traders on the short side. This stock continues to seek support at lower levels, even having shed nearly $10 from its IPO pricing.
Watch List & Short-term Setups:
Below are stocks which are starting to set up but which are not quite ready for multi-day plays. These may provide short-term moves if the levels highlighted below are crossed, but should remain on watch a bit longer for those with multi-day to multi-week timeframes.
TRIP has held above resistance since clearing it last week, creating a mini-base here. This stock is holding up extremely well and may move higher in the near term, although this is not a swing pattern given its size.
KORS is trying to move higher within its intermediate-term trading range, and is facing some short-term resistance here.
GET has held up quite well of late, and although it’s a slow-moving stock it looks poised for higher prices soon.
LNKD held key support today and is turning back up, offering a potential play on the long side for the nimble trader.
SLW looks to be carving out yet another lower high here, putting all eyes on this rising trend line for the next technical sell signal.
NFLX remains weak and the short-term bounce has been far from impressive. Next trend line break could quite easily invite more selling pressure, so it’s one to watch for the active trader looking for a short.
GRA is attempting to retrace the recent decline, but volume is starting to fall as price goes higher. This is a bearish divergence so the rising trend line is the level to watch.
New Swing Trades:
No new swing trades tonight.
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Trades Overview:
This list is a look at our current & potential swing trading positions. Stocks we are already in have “triggered”, while those we are considering for plays have not triggered. Click post title to view print-friendly link.
VECO triggered
Open Position Notes:
VECO triggered a buy today as it cleared the descending trend line at $34.30. With an afternoon trigger, it didn’t have a lot of time to run but it did finish at its highs of the session. Volume left a little to be desired, however, as it perked up slightly but was nothing significant. I’d like to see that change in the days ahead as this one attempts to follow through on today’s lift, so I’ll be watching it closely. I’m leaving my stop as-is heading into Wednesday’s session.
Closed Positions:
No closed positions.
