All Entries in the "Chart Reviews" Category
Breakout Watch: DKS
September 10, 2012 at 2:43 pm
A big element of trading the technicals effectively is having the ability to identify patterns which are under construction. Taking note of stocks which are in the development stage of their patterns helps not only in recognizing key levels to keep an eye on, but also in monitoring the price action before the stock comes to a decision point.
One stock on my radar right now is Dick’s Sporting Goods – DKS, which has been in a longer-term uptrend for a little more than a year. In recent months, however, the stock has put in some healthy rest which has formed a large ascending triangle pattern.
The chart shows well-defined overhead resistance, as well as a pair of uptrend lines from June and July. A push higher out of this pattern sets this stock free to begin building another leg higher.
Here’s a closer look at the chart of DKS for you:
Trade Like a Bandit!
Jeff White
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Picking Up Points in Penney
September 7, 2012 at 9:15 am
Thursday allowed me to close out an excellent 11-day trade in JCP which paid 12.9%.
As simple as that sounds, there were several steps involved, including patience, so I wanted to walk you through the process of this trade from beginning to end in hopes of helping you with your next position.
Perking Up
With JCP having endured a significant downtrend from February to July, the stock sat more than 55% off its highs. That alone is never reason to enter a buy, but it can indicate the shorts are overconfident and the stock has become beaten-down enough to produce a bounce.
So, after seeing a short-term higher low established in early August, it was placed on my watch list. Not for a trade, but simply to monitor in case this developed into a change of character.
Here’s how JCP first looked when I noticed it and put it on watch:
Pressuring Resistance
Having then rallied past resistance, JCP then entered into a narrowing base just beneath a short-term level. Dips were getting bought a bit more aggressively, creating some higher lows over the previous few sessions.
I set up a buy for $24.80, which triggered on Aug. 23. Here’s a look at the chart I shared with subscribers when I listed the trade:
Producing Gains
The initial trigger wasn’t met with great enthusiasm, but neither did the stock fail its breakout attempt in grand fashion. It was quiet, so I stayed with it without panicking. Just a few sessions later, Target 1 had been reached for a pretty quick 8%.
The stock pushed just 8c past that level before seeing some mild profit-taking, which ultimately allowed me to tighten my stop for remaining shares. Here’s a closer look at the chart as of Target 1:
Pausing Before Payoff
The profit-taking was mild and took place on quiet volume, which meant virtually zero pain but also required a little patience. This stage of trades always brings on the questions… “is it done?”… “should I just book this and move on before it pulls back deeper?”.
But I stayed with my tightened stop and waited for the stock to either roll back over and stop me out or push higher and prove itself. That resulted in the final push, worth 12.9%.
Here’s a look at the rest phase before the pop to Target 2:
This was an excellent swing trade which paid off quite nicely. It took some good initial analysis to detect the play, it took proper management of the position once it was on, and it took a little patience to stick with it through the mid-trade lull before the final pay day.
These are the kinds of trades we make a big portion of our money on. Every one of them is shared with subscribers of our stock pick service, along with the entire trade plan from the outset and ongoing evaluation once the position has been put on.
Try us out for yourself and see if we don’t deliver the value I’m referring to. It’s no wonder so many of our members find the monthly price so easy to pay when plays like this are provided.
Trade Like a Bandit!
Jeff White
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YNDX Eyeing Continued Recovery
September 5, 2012 at 9:17 am
YNDX sold off hard and steady from its spring highs, shedding 40% from its peak to the June low. Not coincidentally, that low coincided with the December low from 2011, getting within 5 cents of prior support before stabilizing.
Since June, the stock has gradually worked its way higher, stabilized, and now looks ripe for some continuation. It’s sitting in an ascending triangle pattern, which could spark more buying if resistance gets cleared.
Note how volume is perking up in the last couple of sessions as price turns higher within the triangle. That may be an indication it’s gearing up for a move, so this one belongs on the radar.
Here’s a closer look at the chart of YNDX for you:
Trade Like a Bandit!
Jeff White
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4 High-Level Breakout Candidates
September 4, 2012 at 10:37 am
With the indexes sitting not far from 52-week highs, a number of individual names are also pressuring longer-term resistance zones. I wanted to share a few breakout candidates I’m watching which belong on the radar in the days and weeks ahead.
AIG is acting well with a high Cup and Handle pattern, and is actually attempting a breakout today. A close above $35 is needed to confirm a breakout.
MKC has created a high-level base which almost resembles a saucer pattern. A push through $62 would constitute a solid breakout. This stock trades slightly lighter volume than the others.
RYL continues to exhibit strength, and has spent a few weeks challenging resistance. A breakout takes place through $27.25.
The $56 level has posed as multi-month resistance for CRI, and although the stock has pushed past it a few times intraday it has yet to close above it. That’s a well-defined level to keep an eye on which if cleared, would indicate an exit from this wide channel.
Trade Like a Bandit!
Jeff White
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TRIP Ready to Stumble
August 31, 2012 at 3:09 pm
TRIP saw a big negative change of character in late July with a big downside gap on heavy volume. The initial recovery attempt fell right on its face with the creation of new correction lows just three weeks later, highlighting the importance of avoiding the long side after a trend shift.
Currently, the stock is wedging beneath former support after bounce attempts in the past two weeks have proven unable to reclaim the $34.75 area. The rebound is looking stalled-out, and now price is beginning to weaken. A break of the lower rising trend line of this wedge would occur around $33.10 to be sure, and would likely usher in lower prices in the coming weeks.
Here’s a closer look at the chart of TRIP for you:
Trade Like a Bandit!
Jeff White
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Wait to Place Bets on LVS & WYNN
August 30, 2012 at 11:28 am
Casino stocks have seen a marked improvement in their price action over the past month. A couple of them looked like death, but alas, they have perked back up and shifted their path of least resistance.
Two names in particular are LVS and WYNN, both of which have seen very constructive price action in recent weeks with upside momentum as well as rest phases – a very bullish combination.
I caught an excellent swing trade in LVS (which I shared with members) on Aug. 16 as the stock pushed past a descending trend line at $39.75 to begin another leg higher. That was worth a quick $4.05 to us as just 5 sessions later it hit Target 2 at $43.80, proving to be a timely exit.
Since then, it has given up a couple of points with some mild profit taking, but remains overall bullish. The stock may need a bit more time before it’s ready to rise again, but it belongs on the radar. The next move may not be quite as smooth, but a longer-term trend change looks to be in the making with a considerable cushion in place between current prices and the July low.
Here’s a closer look at the chart of LVS for you and the levels to keep an eye on:
Another name in the same group is WYNN, which has seen a similar shift of character in recent weeks. Following a breakdown from the May-July trading range, the stock worked its way back into the range and early last week pushed past the upper boundary to create a higher high.
Since then, we’ve seen a quiet retreat but no negative character change as of yet. The current pullback could quite feasibly result in another short-term higher low (vs. $99.09 on 8/15), keeping the 4-week uptrend intact. Next it would need to close above the June high ($107.57) to confirm an exit from the channel, and then it’s got ample room to run higher to retrace the May selloff.
Here’s a closer look at the chart of WYNN for you and the levels to keep an eye on:
Each of these are showing signs of life again after harsh corrections from their spring highs, but may need a bit more time before they’re set to go. Keep them on the radar.
Trade Like a Bandit!
Jeff White
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Under Armour Over Achieving
August 29, 2012 at 11:21 am
Relative strength is always applicable when comparing a stock with the overall market, or with its competitors.
In the case of UA, we’ve seen clear outperformance and plenty of relative strength compared to its senior rival, NKE. Since the beginning of the year, UA has tacked on 61%, while NKE has added a measly 2%.
Here’s a comparison chart of UA vs. NKE for 2012:
While UA has had an already impressive year, it has come with a few bumps in the road and the occasional swift pullback. However, overall the chart looks excellent on the year with an early rally, a mid-year trading range, and some continuation higher since late June. Today it’s clearing a short-term trend line from the past few weeks as it challenges the 52-week high. Needless to say, it looks poised to add to its YTD gains.
Here’s a closer look at the chart of UA for you:
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
