Good evening StockBandits!
Friday’s option expiration session ended up largely being a non-event, although the indexes were able to tack on some minor gains ahead of the weekend. Each of them cleared key levels intraday, with the NAZ and DJIA being the only ones able to break out on a closing basis (at 2309 and 10600, respectively). The S&P 500 crossed 1131 briefly, but finished a few points shy of clearing multi-month resistance at the close.
To see the indexes break out in a reluctant fashion like that leaves much to be desired for the bulls – initially at least. It is somewhat understandable that after such a big run, upside may be limited until some further rest can set in. However, technically it’s more ideal for a rest to come before that breakout attempt rather than after it. Nonetheless, the buyers remain in control for now, and there’s no reason to fight that yet.
With that said, the reality here is that this market isn’t at all out of the woods yet. Having 2 of the 3 major indexes clear resistance by just a few points isn’t enough to trust this to stick yet. We’ve just run right up since the beginning of the month, so it wouldn’t be unusual to see some profit-taking arrive in this area. The bulls have established higher lows (relative to July), so that may invite more cash off the sidelines if we happen to see either some consolidation or a shallow dip. That would likely offer the best setup for a follow through move higher in the weeks to come.
Please note: due to a previous commitment I have on Monday, there will be no Broadcast. I will return on Tuesday evening with the next update.
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: CHRW, RIG, NAV, SNDK, SPG, CREE, MHK
Swing Trading Candidates:
SPG is in the midst of an uptrend and yet currently it’s basing to digest the most recent run. This one appears poised for another advance if it can clear the $96 level, so I’ll be a buyer if that level is crossed. As with all swing trades, my stop and target levels for this trade will be on the Hit List post here inside the Hideout.
CREE just recently broke short-term support, and although the stock has bounced back a bit, it has been unable to reclaim that level. A turn lower from here and a multi-day low at $50.60 will trigger a short sale for me as this one again comes under pressure. As with all swing trades, my stop and target levels for this trade will be on the Hit List post here inside the Hideout.
MHK has been climbing in recent weeks, but the volume which has accompanied it has been very poor. Given that this stock is largely range-bound, I’m watching for a break of the lower rising trend line at $47.90 to trigger a short sale and prompt a move back down toward the lower end of the range. As with all swing trades, my stop and target levels for this trade will be on the Hit List post here inside the Hideout.
Bullish Watch:
SRCL, BXP, WLL, EJ, BKD, CHRW, QSFT, SPG, VNO, FRT, EQR, RIG, VPRT, MCO, FMCN, GMCR, RES, CHS, RVBD, APKT, SVN, BLK, ENDP, CPX
Bearish Watch:
XEC, JKS, CREE, CSTR, NAV, V, SAFM, IAG, SNDK, NTES, MHK
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.
