Wednesday, April 23, 2014

Market Keeps Traders On Edge Stay Alert

Considering the five day rally attempt and yesterday's surge in higher volume, today's sell off in lower volume is healthy action to digest those gains. The Nasdaq traded steadily down most of the day and the SP 500 traded in a wide sideways range.

Leading growth stocks were mainly unimpressive, under performing the market the entire day. Stocks in the Oil and Gas sector were the only leading growth stocks that manged to rise in reasonable volume. Synergy Resources (SYRG) added gains to it cup and handle breakout on Monday, Matador Resources (MTDR), Silica Holdings (SLCA), and Concho Resources (CXO) continued recent strong action into new highs in above average volume. Most other leading growth stocks sold off in mixed volume. The good news, the majority remain within consolidations, rounding and trying to tighten recent volatility.

Short trading ideas refuse to breakdown except for a few that gapped down on poor reactions to earning's reports. Cree Inc (CREE) gapped down below the neckline of it head and shoulders pattern and International Game Technologies (IGT) bounced off its twenty day moving average in heavy, above average volume.

Traders once again find themselves in a tough situation trying to determine how much to tighten stops on recent long positions and whether or not to start initiating shorts. The best course of action is to keep portfolio's light and under leveraged until stocks can prove that they can breakout/breakdown, and hold the first scary pullback. Until then, traders are forced to protect capital with tighter then normal stops. Even if that means being shaken out.


Ocwen Financial (OCN) continues to trade along the fifty day moving average trying to rollover towards fifty two week lows. The stock recently tested the fifty day moving average and previous short term trend line in lower, below average volume.

Taser International (TASR) is working up the right side of its double bottom base on top of a previous cup and handle base. The stock is set to report earnings next Wednesday, April 30th, and could pause to form a handle at the intersection of a down trend line and the previous handles breakout level. A breakout above the intersection or $19.73 mid point could set the stock up for another run into fifty two week highs.

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