Good evening StockBandits!
The relief rally which started from last week’s lows gave the bulls something to consider over the weekend. With prices rising from their recent depths while volume diminished, there was certainly cause for concern from a technical standpoint (still is). However, traders returned to upbeat M&A news in the tech space and it provided reason for a continued lift to kick off the new week.
An upside gap was never filled, and a steady rally in the final few hours of the day left each of the indexes with solid gains of nearly 2%. The market finished at its highs of the session, indicating the buyers ran out of time before they ran out of cash to put to work.
A close at an extreme (in today’s case, a close at the high) often signals follow through for the next day, although we’ve seen multiple occasions lately where that failed to prove true. With that said, anything is still possible going forward, particularly after massive initial moves off the lows of last week.
In addition to the obvious high-volume breakdowns and major declines we’re seeing this market attempt to rebound from, we’re seeing a relief rally come on considerably lighter volume. These moves are relatively steep and therefore not at a sustainable pace for more than a short period of time, which means when the music stops we could see another quick wave of selling kick in. That’s the point at which we’re likely to gain a better feel for the health of this market. For now, it’s still quite difficult to trust, not only in terms of chasing this initial bounce but also in the sheer lack of well-defined setups in the charts of individual stocks.
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!
–
Video Stocks Discussed: RGLD, VECO, MGA, TCK
Swing Trading Candidates:
NONE TONIGHT – 100% Cash
[table “100” not found /]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.
