April 5 Update

Hello all,

I’ve been keeping an eye on the market and it seems as though we are at or very close to a breaking point on a descending triangle.  This is true both of the DOW and the S&P.  Will we bounce or will we push lower?  There’s no answer to that until it actually happens.  Once it does happen, the direction of the market will become more clear and trades with low risk and high reward can be taken.

On a side note, with the addition of $AAPL to the DOW, I believe the S&P is a better indicator of overall market health.  So any time I reference “the market”, I am talking about the S&P unless otherwise specified.

A number of stocks are at key support levels, some are in bollinger band squeezes, and others are in existing down-trends.  Let’s take a look at a couple of stocks exhibiting this behavior:

$JNJ:

As can be seen, $JNJ has been in a down trend in recent months.  It appeared to have formed a double bottom, but it is about to retest that bottom.  $JNJ was in a downward channel, but made a higher high and slightly broke out of the channel which is slightly concerning.  However, if it breaks and closes below $98, I’m looking for a swing trade over the course of a week or two down to $95.  MACD is already looking slightly bearish and a close below $98 should support a short trade.  The other way to play this stock is to go long if it bounces off $98, but that would be a counter trend trade and would require a tight stop.  JNJ$LVS is another stock in a downward trend worth looking at.

$FSLR:

This stock does not necessarily follow the trend of the overall market.  As a matter of fact, it has been in a side-ways pattern for around a month or so and is now in a bollinger-band squeeze.  Whichever way it breaks out of the band is the direction I would take the trade.  However, I would start with a small position due to the possibility of a “head fake”.FSLR$HES is a stock just about to enter into a bollinger band squeeze.

$EXPE

$EXPE is a great example of a stock breaking out.  The only thing I am concerned with is if the market pushes lower, the breakout could fizzle.  A low risk trade would be watching for $EXPE to come back to $96.74 before getting in and keeping a tight stop.  You may miss the move with this approach, so the alternative is to get in at market open understanding that you’ll want a wide stop.EXPE

$EBAY:

$EBAY is and has been in a nice uptrend.  It sits on the ascending trend line and is a good low risk/reward play.  However, this one may also depend on the direction of the market.  MACD is looking bearish so the stock may roll over.  If it does $55.50 is the first target.  $54.00 is the second.  If we get a bounce, $59.70 looks likely as a first target.EBAY$BBY is another stock in a similar up-trend.

That wraps up this update.  Have a great night, hope you had a happy Easter.  Good night and happy trading!

Another Day Another Doji; Market Review for July 2, 2013

Another day, another doji and another failed attempt at cracking the 50 SMA.  I’m not entirely sure what this means other than the fact that doji’s represent market uncertainty.  Could we be forming some sort of bearish flag?  I think it’s definitely possible as volume continues to decrease, but curiously, the oscillators are ticking upward.  MACD has almost crossed while Stochs have already crossed.  It’s very interesting where we may end up from here.  One thing to keep in mind tomorrow is that we only have a half day of trading.  Markets close at 1:00PM EST and then resume on Friday.  I can’t see us breaking the 50 on a half day.  I think we will just meander tomorrow and leave the move for Friday or maybe more probable; Monday.  Personally, I am still looking at a bearish break out, but time will tell.  SPY_JULY_2_2013

REVIEW OF YESTERDAY’S PICKS

$BBY:  This stock sunk like a rock today.  Fortunately, you never would have been triggered in bullishly.  Today looks like a tweezer top.  I’m not sure what this thing is going to do.  I’ll leave it be for now.

$WYNN:  WYNN you would have gotten triggered in at the end of the day.  I did not get in due to being so close to my first target of 125.  A close below it and I would go short down to 121.

$GS:  You would not have gotten triggered in at the end of the day.

$GPS:  You would have gotten in and then stopped out.

REAL ACCOUNT ACTIVITY:

$POT:  HOLDING (-7%)  I am sticking with my stop of 38.30.  

$GPS:  OPENED/CLOSED (-15%)  I only bought 1 contract so this loss was really pennies to my account.  I’m not sure if my stop was too tight, but we’ll see within a few days if it was in a good position or if I should have kept it lower.

 

Stock Picks for July 2, 2013: $BBY, $WYNN, $GS, $GPS

Let’s get right to it…

$BBY:  This stock broke out of a Bollinger Band with solid volume.  In addition, we are above the moving averages, oscillators are turning up, and RSI is at a healthy level.  I’m planning on getting in after the first 15min.  Now, please be warned, I am not experienced with Fibonacci retracements or extensions, but here is my crack at it.  I see a target of 31.61 and I plan on putting my stop below the first 15min candle. BBY_JULY_2_2013

$WYNN:  I believe we are in the midst of a bullish flag.  Note that volume has been declining.  I like getting in short on a close below 127.30.  My first target is 125 while the second is 121.77.  Stop is TBD.WYNN_JULY_2_2013

$GS:  This one seems to be shaping up into a sort of pennant.  I like this one short on a close below 150.70.  Target is 146.35.  I know we could also break bullish, but in that case we would already have to break above the 50 SMA.  We’ll see where we close, but right now my focus is on a bearish move.  Notice that volume has been decreasing in this pennant.  GS_JULY_2_2013

$GPS:  Last but not least, we have $GPS.  Interestingly, this is setting up very similar to BBY.  However, the volume was not as strong, so I’m not as convinced about this one, but it’s certainly worth keeping an eye on.  Again, I made an attempt at a fibonacci extension, so my first target is 44.60.  My stop will be below the first 15min candle.  Please let me know if you have any questions or comments on the fib lines that I drew.  GPS_JULY_2_2013

That about wraps it up.  Good night all, and as always, good luck!