Posts Tagged ‘Range bound charts’
As the U.S. presidential election approaches the market is in “wait and see mode” with key resistance and support levels. While it is possible to trade these ranges for those that have the desire to be active there is always the option of waiting in cash for a trend to develop, I suspect after the election results are out (hopefully Tuesday night) we will see a trend emerge, the market can go either way but we are at some key support levels and are oversold by many measurements. Stay vigilant, manage risk, and be ready to make some money. Here are the current levels I am watching for break outs to happen.
The SPY has buyers at the $140 level but sellers waiting at the 50 day line.
The Diamonds ETF has great support at the $130 level but ran into resistance as it approached the 50 day moving average.
Current support for the QQQs is at the 200 day moving average so far buyers are accumulating at that level. A close below that level is a signal of a true downtrend may be emerging.The 20 day moving average is also a near term resistance.
Apple has a new resistance level at the 200 day moving average after today. The 5 day ema has been resistance for over a month. I need to see these two levels broken and held to get bullish on a reversal play.
Here are my thoughts on the top three stocks on my watch list. But be aware I trade a very fast time frame and could change my opinion at the open Tuesday if prices move strongly through support or resistance that changes what I think the stock is saying. I do not trade my opinions, I trade price action, I try not to have opinions but try to see what is actually happening and trade accordingly. In trading I am trying to translate the chart in my time frame not write a story based on my own personal opinions.Our beloved Apple has been in short term down trend since the gap up after the Samsung victory. We had a very nice bounce as the stock approached the 20 day sma. It appears to me we are range bound in the $660/$680 area. For me the next two logical long buy points is at the 20 day for a bounce or at a break above the 5 day ema for a shorter term momentum play to $680. A close above $680 could be a signal we go to $700. I would tread carefully here with small positions and tight trailing stops to lock in profits. Google is in a short three day price range of $680/$689. The 5 day ema is acting as support. Break outs in this stock have been sold into. I will be buying at $680 or the 5 day ema and selling as it approaches the $689 level with a trailing stop. If we can close above $689 the next stop could be $700 the next day. If Google loses the 5 day ema and does not retake it quickly it then will likely reverse to the $660 level and then get support.
Price Line is wedged between the 200 day above and the 5 day ema below. It has actually been in an uptrend since bottoming out at $553 after the post earnings massacre. The sweet spot to short is at an intraday rejection back below the 200 day, if it can close above the 200 day then it will lead to money managers buying back in due to so many that have the close above the 200 day as a buy point in many of their systems. This is the line in the sand between many buys and sells. I am only interested in this as a short play not really as a long trade due to it having so much over head resistance from people that are waiting to get back out at higher prices that are setting on losses after the plunge after the earnings announcement. If I was going to go long I would use Apple, Google, Mellanox, or KORS, these could really run to new highs with very little overhead pressure from past holders that lost money.