April Pullback Retracement Play in Facebook FB

Apr 1, 2014: 1:52 PM CST

Facebook (FB) shares face a major “make or break” support challenge at a key opportunity level for traders.

Let’s set the chart up to plan a potential “support bounce” or “alternate trend reversal breakdown” play for FB.

We’ll start with the broader Weekly Chart for a top-level reference:

Facebook FB Weekly Chart Technical Analysis Trades

We see a strong uptrend took shares from the $25.00 per share level in 2013 to the recent 2014 peak above $70.00 per share.

A weekly chart or steep retracement (sell-swing) took price to the potential support of the rising 20 week EMA into $60.00 per share ($59.80 at this moment).

That’s where we’ll focus our attention as we plan a potential support-bounce play off this level.

Keep in mind that a failure or immediate breakdown under the $60.00  per share level opens a downside pathway toward $50.00 per share as an “alternate breakdown” thesis.

The Daily Chart reminds us why $58.00 and $60.00 are the current focal prices:

Facebook FB Daily Chart Fibonacci Support

We’ll start with the small “triple top” or horizontal resistance through January 2014.

Next, we’ll incorporate the rising 20 week EMA (near $60) with the 50.0% Fibonacci or “halfway point” of the November to March recent rally ($58.00).

Note the spike reversal candle develop from the underside of this pivot level.

It’s simplified analysis/strategy, but we’ll look for a continuation “support bounce” play up into the 20/50 day EMA cross-over level near $64.00 for an initial target, and then a breakout through EMA resistance to open a target pathway toward the $72.00 divergent high from earlier in March.

Keep these simple yet overlapping levels in mind when planning trades in Facebook (FB) stock.

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Corey Rosenbloom, CMT
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March 31 Intraday Sector Breadth and Trending Stock Scan

Mar 31, 2014: 12:17 PM CST

What does “Sector Breadth” reveal about today’s session (and which sector should we be avoiding from the long side today?) and which stocks top our intraday up and down trending list?

Let’s start with Sector Breadth to begin today’s Mid-day Stock Market Update:

Our Intraday Sector Breadth (stocks in the S&P 500) Chart shows strength across the board… except for Energy ($XLE).

At the moment (mid-day), all stocks but two are trading higher in the Dow Jones Industrial Index (Microsoft MSFT again tops our bullish list as it extends its breakout; Exxon-Mobil XOM and Coca-Cola KO are down at the current moment).

Also, 87% of S&P 500 stocks are up on the session in a wide-arc bullish surge of money flow back into stocks.

For intraday traders hoping to ride intraday trending stocks into the close, here are four Trend Candidates:

Cigna Corp (CI), Public Services Enterprises (PEG), and CarMax Inc (KMX) are showing strong, persistent intraday uptrends along with a weaker impulse in Union Pacific (UNP).

For those aggressive traders willing to play against this instant flood of money into the stock market, here are four downtrending candidates for you:

Range Resources (RRC), Keurig Green Mountain Inc (GMCR), Williams Companies (WMB), and Zoetis Inc (ZTS) provide potential intraday downtrend continuity candidates.

As a reminder, it’s generally better to trade with the direction of money flow and intraday trends instead of against them.

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Corey Rosenbloom, CMT
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Quick SP500 Trend and Range Surfing Update

Mar 31, 2014: 12:00 PM CST

As we end March and the first quarter 2014, let’s take a quick look at the current S&P 500 trend, key levels in play, the current short-term range and update last week’s “Key Inflection Support for S&P 500” post.

First, be sure to read last week’s “Support Bounce Play off the 1,840 Level” post – price played out exactly as would have been expected via the “support bounce” or “trend continuity” thesis.

Compare last week’s chart off 1,840 to the current picture at the top of the range:

S&P 500 SPX Top of Range Trend Daily Update

Price held the 1,840 confluence support area (buyers stepped in; sellers stepped out) which resulted in a sharp upswing back to the 1,875 target price level.

For now, focus on the prior highlighted regions and the previous update “Repeat Topping Price Pattern in the S&P 500” to get a sense of the repeating (echoing) pattern, none of which resulted in a full reversal in price (the uptrend simply continues).

We’re still playing the same scenario (game-planning) as in each prior “weak push to new highs with divergences” – each time resulted in at least a slight pullback as the uptrend continued.

Another breakout here above the 1,880 level suggests that price once again will impulse multiple days higher toward or even above 1,900 – thanks in large part to short-sellers covering losing positions.

With the broader picture in mind, let’s  now turn to the tighter intraday chart for short-term planning:

S&P 500 SPX SP500 Range Rectangle Value Area Price Pattern

I color-coded the short-term (actually the entire month of March 2014) range rectangle price pattern.

The extremes (“spike rejection” or excess) of the pattern rest at 1,840 (confluence with the Daily Chart support) and just above the 1,880 level.

The 1,875 level is actually a more important reference level as we can see from the smaller blue horizontal line.

Similarly, 1,850 has been another key short-term level that is hidden if you only focus on the recent “spike” extremes of the pattern.

Right now, we trade into the 1,875 reference level – there’s a tiny “open air” pocket (red) from 1,875 to the 1,883 level and a potential Breakout via Short-Squeeze opportunity that may develop quickly should buyers push the market above 1,885.

Otherwise, use the “range reference” levels to plan short-term/intraday trades within the broader context of the non-stop bullish uptrend and similar Daily Chart mini-rectangle patterns like this one.

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Corey Rosenbloom, CMT
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Three Aggressive Reversal Plays from Consecutive Down Days

Mar 28, 2014: 2:45 PM CST

As we end the week, let’s look at three stocks that top the  “Most Consecutive Down Days” stock scan – these can be aggressive “retracement/reversal” candidates going into next week.

We’ll start in order of number of down-days (daily chart) in a row:

Westpoint Innovations WPRT

Westport Innovations (WPRT) tops our scan with 14 down (sell) days in a row!  Shares developed a reversal and first ‘up day’ not seen since March 7th, three weeks prior.

Our next candidate is Multimedia Games Holding Company (MGAM) with 11 down-days in a row:

MGAM Multimedia Games Holdings

Shares have plunged in a downtrend from the $34 (divergent) swing high to the current $25.00 per share possible inflection (reversal) point.  Note the two doji candles but the addition – as of this posting – of a 12th day in a row down.

Finally, retail store Tuesday Morning (TUES) appears on the #3 spot on our stock scan:

TUES Tuesday Morning

Note the prior divergences at recent turning points (reversals) in the swing structure of price.

While we don’t see another divergence currently, shares are trading strongly up off the rising 200 day SMA (inflection point).

See my prior post on Amazon (AMZN) for another example of a 200 day SMA inflection play.

We use stock scans to find candidates we would not otherwise discover.  Study the charts, key levels, and opportunities closely instead of jumping in with a long (buy) position to play a possible reversal.

Any reversal strategy is aggressive but some traders enjoy these aggressive tactics more than any other strategy.

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Corey Rosenbloom, CMT
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Corey’s new 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).

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Key Support Pivot Forming in Amazon AMZN

Mar 27, 2014: 2:39 PM CST

Amazon.com (AMZN) shares hit a confluence support target today, as I highlighted originally in the post “Charting a Hidden Resistance Level in Amazon.”

Let’s update the analysis to include the newly achieved target and visualize a support bounce… or steeper retracement breakdown play.

We’ll start with the Daily Chart update:

AMZN Daily Chart confluence support uptrend inflection pivot point

As referenced in the “Hidden Resistance Area” post, Amazon shares traded down against the ’secret’ resistance into $380 per share.  For a broader background before the upward bounce, see my update Charting the Amazon AMZN Support Bounce.

The first and most logical target was the prior swing low into the $345 per share area (achieved yesterday) and then the rising potential support of the 200 day SMA ($338.20).

At the moment, although shares traded initially through the 200 day SMA target, they’re resting right on top it it to close the session directly on the 200 day SMA pivot target.

The rising 50 week EMA forms a tight confluence with the 200 day SMA as seen in the chart below:

AMZN Amazon Weekly Chart Trend Retracement Reversal Trade

The other focal point is the rising 50 week EMA into $334.32 per share.  Focus on this level for any sort of upward bounce that may develop off this potential pivot.

Otherwise, Amazon.com (AMZN) enter ‘reversal’ territory with a break and close under confluence support levels, trendlines, and rising moving averages (on all timeframes).

For the moment, this will be the “line in the sand” for bullish or bearish strategies in Amazon.

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Corey Rosenbloom, CMT
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Corey’s new 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).

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