May 29 Midday Rally and Stock Scan Update

May 29, 2014: 12:54 PM CST

The bulls haven’t given up the fight yet and the S&P 500 crept its way to another new all-time high this morning.

Let’s peel back the layers to reveal sector breadth and highlight our top trending stocks for the day.

We continue to see the market stretch higher against negative divergences, but price us the ultimate authority on trading profits and losses (not indicators which only highlight probabilities).

The key focal points for today will be the tight compression we’re seeing at the moment (yellow highlight) between the 1,913 and 1,915 index levels.

Also, price is trapped roughly in the middle of a rising parallel trendline channel as drawn, meaning an upside target extends toward 1,920 and downside target just above 1,912.

Look to trade short under 1,912 or else “creeper trend bullish” in the absence of an actual price breakdown.

Sector Breadth is bullish at the moment:

We’re seeing a mixed message from intraday Sector Breadth, where the weakest sector today is Utilities (which is bullish) yet the strongest sector is Consumer Staples (which is typically bearish).

The other strong sectors include Energy, Materials, and Health Care.

We’ve been focusing on Financials, and it (like yesterday) is showing relative weakness mid-day (along with Consumer Discretionary and Technology).

With Breadth mixed, let’s focus on individual stocks showing strong trends in today’s session:

Hillshire Brands (HSH), Hormel Foods (HRL), Yelp, and Quest Diagnostics (DGX).

Our downtrending (trend day) candidates include the following:

Xylem Inc (XYL), Generac Holdings (GNRC), Mohawk Industries (MHK), and Vulcan Materials (VMC).

We’re still using caution and are on high alert for any bearish reversal, but we continue to follow price action at the exclusion of all else.

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

2 Comments

2 Responses to “May 29 Midday Rally and Stock Scan Update”

  1. May 30 Weak Trending Intraday and Stock Scan Update | Afraid to Trade.com Blog Says:

    […] yesterday’s breakout beyond 1,915 (note the short-squeeze and bullish breadth commentary yesterday), we saw a rally extend just above the 1,920 target to peak with clear negative divergences into […]

  2. Weak Trending Intraday and Stock Scan Update Says:

    […] yesterday’s breakout beyond 1,915 (note the short-squeeze and bullish breadth commentary yesterday), we saw a rally extend just above the 1,920 target to peak with clear negative divergences into […]