Good evening StockBandits!
Last week started out with some selling pressure, but support was found and some modest buying pressure emerged to produce a fair recovery. On the week, the indexes shed just a few points (only the RUT was higher), offering limited follow through and a lack of lasting momentum.
Volume was expectedly light ahead of a major holiday 3-day weekend, and that also kept the price action pretty contained. We might be in for a bit more of the same as we start this holiday-shortened trading week on Tuesday, as there will be some traders still on vacation, whether physically or mentally!
Looking at the daily charts of the indexes, we are seeing some descending trend lines after the short-term lower highs which have been set in recent weeks. As we know, anytime the market starts to move predictably in that kind of fashion, the stage is being set for some kind of surprise. Whether or not we see that this week remains to be seen, but suffice it to say we need to watch those descending trend lines closely. It’s not out of the question that this market could turn higher from this relatively shallow pullback, so we need to leave our biases at the door.
I am encouraged by the charts of individual stocks I’m seeing. Quite a few are working on some constructive patterns, so even if we see some quiet price action over the coming few days, that would only help those patterns to mature further. My plan is to consider plays on both sides (long and short), and generally stay selective with new swings until we see some better momentum surface one way or the other.
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: RENN, GNOM, AET, WDC, ADSK, KKR
Swing Trading Candidates:
KKR has pulled back in recent weeks from its highs, but has held above prior support. I also like how this one has stabilized in recent days, even giving a bit of a potential shake-out move last Monday before recovering. I’ll be a buyer if this one clears the trend line at $17.25, expecting a move back up to higher levels. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
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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.
