Good evening StockBandits!
Harsh breakdowns last week put an end to the short-term uptrends which had been building since the July 1st low in the major averages. The reversal-prone nature of this market in 2010 was revisited, with an abrupt shift in momentum and a sudden absence of the dip-buyers who had been so persistent in the past several weeks.
While the shake-up certainly left some traders in bad shape (particularly those who failed to employ or abide by stop losses), it may prove to be beneficial for the longer-term health of this market. The correction since the April highs has been a harsh one, so we can’t expect to see a steady climb right back up. Higher lows need to be established on an intermediate-term basis, and it could be that the pullback which just began is on the way to creating those. The July lows will need to hold if that’s going to prove true, so the coming weeks will be important for the bulls.
In the short term, many stocks which had been building bullish bases and patterns saw a big change of character with those patterns being negated. As a result, my watch lists saw a big change in complexion last week. Also, stocks which have broken down are for the most part not in position yet to consider for shorting. That translates into the need for patience while we let new patterns build, rather than trying to chase moves. I do expect to see plenty more trades arriving in the days to come, as a market on the move will continue to offer up opportunity.
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: RINO, PXP, MMM, ROST, BID, IT, PLCE, GS, GOLD
Swing Trading Candidates:
GOLD has a series of lower highs and lower lows in recent weeks, as the stock has been dominated by a downtrend line since peaking in late June. A key support zone (former resistance) has now been met, which if broken, could start another leg lower for this stock. I’ll be watching the $85 level for a break to trigger a short sale, as this one has some room beneath that level before the next support areas are reached. As with all swing trades, my stop and target levels will be on the Hit List post here inside the Hideout.
Bullish Watch:
RINO, BAX, ATK, SLW, TRW, BID, IT, PPO, PXP, MYGN
Bearish Watch:
WDC, NEM, THOR, BBY, TIE, GS, WCC, FO, FSLR, GOLD, TMO, JEC, MMM, ROST, PLCE
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.
