Good evening StockBandits!
Hope your holiday weekend was a fun one and you’re rested and ready for a new week of trading.
Traders were apparently buying fireworks instead of stocks on Friday, as Thursday’s lows were in fact respected, yet more downside was seen on a closing basis. An afternoon attempt at a rally was squashed in the final minutes of trading as the sellers emerged one last time to erase the gains, and perhaps to ensure that the buyers don’t get an ounce of confidence ahead of the weekend.
Whether this next week delivers the bounce we’ve been waiting for remains to be seen, but if there’s one thing we can say at this point, it’s that this market certainly is due for some green. We’ve seen measured moves take place on the current decline, both in terms of duration and size, compared to the mid-May selloffs. That adds to the notion that a bounce could arrive soon, aside from the deeply-oversold condition of this market.
What’s so interesting at a juncture like this is that both the bulls and bears are rooting for a relief bounce from here after having seen support zones violated across the board. The bulls would love an opportunity to raise cash on a bounce, as many of them have likely missed their opportunities to sell on the way down. A bounce would offer them a second chance. The bears, on the other hand, know that many stocks are simply too stretched on the downside at this point to aggressively short. A bounce would give them reason to book profits, and allow them to get repositioned on weak or failing rallies.
Clearly, we’re at a very interesting juncture here. Anything is possible in this market, and it’s important to consider that as we head into Tuesday. This market could fall apart further, or it could gap lower and rebound, or it could finally put together the long-awaited relief bounce.
My game plan for Tuesday is straightforward. Once I see some cleaner patterns emerge, I’ll look to do more swing trading. Until then, my timeframe is going to remain short as there are simply no patterns which are sufficient at this point for holding overnight. I’ll outline what I’m looking to trade and why in tonight’s video.
As always, I’m available for email help or via the comments here in the Hideout, so let me know if I can help and otherwise go get ’em tomorrow. I’ll see you back here then.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: FDX, AMZN, BIDU, ADBE, ADSK, AEL, BID
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
ADBE, L, ADSK, PPO, AEL, YGE
Bearish Watch:
BID, FDX, AMZN, DRI, BIDU
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.
Jeff,
New subscriber here. I was wondering what the profit target and stop prices are for the above day trades?
Thank you
Hey Ramesh,
First of all, welcome! Glad you’re here and hope you’ll bring any and all questions you have right here when you have them.
As for targets and stops, those are not provided for day trades. Swing trades get all those parameters, but day trades are provided with entries for traders who don’t mind managing their own exits.
We do have the day trading strategy page to use as a guide, as that’s how I manage my day trades.
Hope this clarifies some things, and again it’s good to have you here!
Jeff.
Thank you for your reply and for the link provided for day trading strategy. I read the guidelines. Very nice instructions.
Just a general trading question. why do you prefer a Buy Stop order ( Longs ) instead of a regular Buy Limit Order at the Trigger price?
Just for an example. This is what I was thinking.
Buy 500 ADBE Limit Order @ 27.00. From reading your e-mail, you seem to prefer a
Buy 500 ADBE Stop Order @ 27.00 which would place a Market Order if the ADBE price trades up to or through the stop price.
Also, would you recommend using bracket orders,? The reason I ask this is, using bracket orders, I don’t have to manually monitor the price movements. If the trend is going in my favor the profit gets triggered and if the trend is going in the revers, the stop order automatically triggers thereby protecting me from minimal losses.
Sorry for so may questions.
Thank you
Ramesh Vunnam
Ramesh,
Questions are never a problem…as long as you have them, keep asking them! I’m here to help you find trades and learn.
With the stop orders, I use a regular stop order (which of course becomes a market order when triggered). I do this because I’m in front of the PC all day, so if I get slipped on the trade with a bad execution or something, I can adjust right away manually.
Bracket orders are excellent, and I use them for every swing trade I make. If you’re not monitoring your day trades, then yes I would suggest using brackets for them as well. That way, you’re keeping your risk defined, and you’re ringing the register once a good move has been captured.
Hope this helps, and keep those questions coming when you have them. Have a great day of trading!