Good evening StockBandits!
Following Tuesday’s pullback, stocks had a chance to accelerate lower today – and didn’t. Even considering the intraday downtrend which formed from the morning highs, a late-day bounce provided enough lift to put the senior indexes slightly positive while the NAZ & RUT each posted only minor declines.
The rebound did more than erase losses, as it also demonstrated the presence of some dip-buyers. While this market still isn’t out of the woods, the fact remains that the initial bounce has not yet failed. The longer the market is able to avoid a rapid descent back toward last week’s lows, the longer a low-level trading range may persist.
This digestion phase has been expected after such a swift move lower, and it’s healthy price action even if the ranges have narrowed in recent days and volume has tapered off. We’re still in the late summer, so trading volume could remain quiet until after Labor Day, but only if the news flow allows for this rest phase to continue.
The quieter price action of the past couple of days has also helped to a great extent the number of charts setting up with patterns. Volatility has contracted and that’s helping as well, so I’m expecting to see more bases to trade from going forward. Tonight I’ve got a few day trade candidates I like for Thursday’s session, along with a couple of swing candidates which have well-defined risk due to their chart patterns.
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: MPEL, SU, NAV, MS, HANS, APA
Swing Trading Candidates:
HANS is acting well with a recent rally and a few days of rest. This has created a tight bullish consolidation, and the stock may soon get back on the move. Although some resistance isn’t far overhead, the buyers remain in control of this one (note all the biggest spikes in volume have come on advances in recent months). I’ll get long if this one clears $81.25 with a stop just beneath short-term support. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
APA rolled over hard a few weeks ago and has since bounced only partially. During the bounce, volume has diminished, so it has failed to confirm the rebound in price. I’m now watching this bearish rising wedge for a breakdown to initiate a short sale. I’ll get short if the lower trend line gets broken at $104.20, and will place an initial stop above the wedge just in case. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
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.
Hey Jeff….
Wondering why you almost always feel that the closing price on the index average is more important that intra-day highs and lows.
Hey Jon,
Good question! It’s a matter of opinion. I do take into consideration the highs/lows, but I figure there’s greater importance on the close as that’s the final consensus for where the day finishes. I might decide to hop in the car and drive up and down the highway, maybe 50mi north and 25mi south, but ultimately what dictates how far from home I am is where I end up. That’s how I view the market and the closing prices.
What’s your opinion on it? Why? Always interesting to discuss!