Quick Summary:
Video analysis of entire focus list and SPY. 50 dma key level for SPY. Focus list mainly strong technical setups. Watch for bounce plays to short as week progresses. Current trades $BITA (short) and $LULU. Took profits in $UPRO Friday.
Video Analysis:
Video analysis (7 minutes) to start the week hits on all of the focus list stocks, SPY and some possible short setups not discussed in the report. I recommend watching this one to get a feel for the setups and entry areas for stocks we are watching.
Key SPY Pivot Levels: Round number $200, Old high 201-202, 50 dam 197.01, 100dma 195.59 , gap 193 pivot lows 190-191
Under the Hood and Trading Game Plan:
As expected $SPY bounced strong off the hammer formation right up to the 50 dma. That level is key here. If it breaks the 50 dma, there should be a test of the recent all-time highs. No break and we look to fill the new gap and possibly test August lows. So how do we play this?
1) Sit it out and wait for confirmation. A clean break of the 50 dma setups up long entry.
2) Take an anticipatory short position looking for failure at the 50 dma.
The easiest setup would be a break of the 50 dma followed by failure. This would be the easy confirmed short setup.
The game plan continues to be very selective with setups and look for optimal entries. There is nothing wrong with sitting out right now and waiting for the right time to pounce.
Current Trades
I exited $UPRO (leveraged long $SPY), taking profits on the expected bounce off Thursday's "hammer" entry. I gave up some gains by exiting the entire position on the morning bounce, however with this market's unpredictability I prefer to take quick profits.
I entered $BITA short near the close on Friday. This setup is available as long as price is under the 50 dma. Stop is just above the 50 dma with target in the $60-65 range.
I am still holding $LULU, which did not bounce with the rest of the market despite a nice hammer candle at support.
The Trade Results Journal/Spreadsheet is up to date.
The Focus List
Lots of stocks bounced off hammers or support after being beaten down, much like SPY. Now we have to assess whether these are dead cat bounces to short or continuation of uptrend moves. The focus to start the week is on stocks with strong technical setups to get long. As the week progresses, we'll look to the rest and reevaluate the bounces. These stocks could be shorts or longs.
Strong Setups: ZU,GPRO,MNST,MBLY,TWTR,PANW,SPLK,MEG,ZLTQ (All setups discussed in video)
MEG broke out from a downtrend on very strong volume. Entry on slight pullback
ZLTQ has been in a strong uptrend and pulled back with the market. It is now bouncing off support. Entry $21.50-22.25, stop around $21 and tarot at $25-26.
TWTR broke out slightly to new highs on slightly elevated volume. An entry here with tight stop below the breakout level offers an easy low risk way to play it. This one is interesting because there is an RSI momentum divergence. A break below the high signals an excellent short setup. So this stock can be a *short of long setup*.
Market Leaders
All market leaders, with the exception of $CAT, bounced nicely on an overall market bounce day. $GS, $GMCR and $NFLX look the most appealing as continuation bounce trades. Watch $FB closely to see if it can break to new highs.
Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Anayze Your Swing Trade Results It is important to know these rules if you trade off the Report.
New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter (twitter.com/PaulJSingh).
