Good evening StockBandits!
A positive open this morning gave way to a gap fill and a turn negative by mid-morning, but from there we saw nothing but strength. The indexes bounced about 1%, pulled back quietly and rested, then lifted once more into the closing bell to go out at their highs of the session.
Interestingly, yesterday’s selloff was largely erased with today’s rebound, which gives the bears something to consider here in the short term after such a convincing downside reversal. However, we’re still caught in trading ranges at this point beneath some key levels, and until that changes there’s not much for either camp to get excited about. As long as we’re range-bound, day-to-day shifts of direction will happen and momentum will be a temporary thing.
I have noted that bottoming is a process more often than an event, and it’s possible that’s what the market is attempting to do. I am predicting nothing, as my job as a trader is to create if/then scenarios to put capital at work in great risk/reward setups, but simply stating that the market had a shot at some downside follow through today and the sellers were absent. I would expect to see heavy buying accompany any push back up through resistance (former support), so I’ll be very careful with shorts should that happen to occur. While we’re range-bound, setting up plays on both sides of the market allows for some natural hedging and could also open doors of opportunity regardless of where we go from here.
I’ll run through a few of the indexes here and then share some new plays I’m eyeing.
NAZ – The NAZ jumped back up today after briefly cracking Monday’s low, but needs to clear 2887 in order to make some lasting upside progress.
SP500 – The S&P finished within 1 point of Friday’s close today, largely erasing yesterday’s losses. However, 1335 is the big level which is going to need to be cleared for this index to keep moving higher.
RUT – The RUT only reclaimed part of Monday’s losses and is still shy of 772, a major level which has seen a few recent failures.
Charts of Interest:
Below are some charts of interest, from market leaders to example charts:
WMT is putting in some needed rest here but may set up again soon.
MDVN is a few points shy of a breakout here but should be on the radar, particularly if price edges toward upper resistance.
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.
CERN turned away from its upper channel line yesterday and didn’t act like it was ready to go, but then today it reversed back up and is just now getting through it. This one may offer nimble traders a play tomorrow if it starts to show some follow through.
SIX is at the upper end of this small bull flag and may not sit here for long if recent momentum is any indication. This could offer a quick move higher if it’s able to clear $50.80.
TRIP is rallying up toward key resistance with this wide channel, and may break out soon. Ideally, I’d like to see this one rest for a couple more days before attempting to break out, particularly since today’s volume was nothing special.
NGD is facing key resistance here but could get through it as soon as tomorrow. A push through $10.45 could offer a quick lift in price, but for me I don’t see a clear-cut swing exit so this is not an overnight candidate for me yet.
New Swing Trades:
These are the stocks I’m setting up for new plays. I will wait for my trigger price before entering, and all stop and target levels are provided below. For those of you who are new here, please see the Swing Trading Strategy for more details on how I manage these trades.
NEM is in a well-defined uptrend channel over the past several weeks and here it has tested rising support and held. A turn higher through $50.80 will trigger a buy for me as this one heads back toward the upper trend line. Details on stop and target levels are on the Trades Overview grid below.
LNKD has broken major support and then tested it in recent days, unable to reclaim it. This small rising channel beneath broken support is a short setup I’m not ignoring, so I’ll look to short this stock for a swing trade if it breaks the lower rising channel trend line at $92.80 on the way to lower levels. Details on stop and target levels are on the Trades Overview grid below.
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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.
GRA stop tightened, NEM & LNKD added
Open Position Notes:
GRA made an incremental new low today on the daily chart, only to reverse back up with a strong finish on heavy volume. This stock seems to be trying to stabilize here but I’m going to give it a little room to fluctuate here for now. Yesterday’s weakness was quite convincing, but today’s bullish reversal back up cannot be ignored. I’ve tightened my stop for remaining shares just in case today’s strength finds follow through.
HOT bounced back today but upside volume was weak and the stock seems to simply be testing the breakdown area which was cracked yesterday. It’s now slightly against me, but I’m going to stay with it for now and allow it room to breathe. Lower highs are still intact and this rebound on the heels of a sharp downside reversal yesterday looks to simply be a relief bounce.
Closed Positions:
No closed positions.
