All Entries in the "Swing Trading" Category
The Northern Road to Recovery
September 13, 2012 at 4:36 pm
One stock on my radar right now is Northern Oil and Gas – NOG.
Having emerged from a 48.5% correction from the January high to the July low, the stock has seemingly turned the corner technically. A quiet lift into mid-August was met with only limited selling pressure on weak volume. That carved out a higher low, then strength returned on heavier volume with the arrival of September to mark a higher high.
Currently the stock is sitting in a tight bull flag pattern, which if resolved to the upside, could spark a continued recovery in the name. This is one to put on the radar for the days to come, as this rest phase sets the stage for higher prices once again.
Here’s a closer look at the chart of NOG for you:
Trade Like a Bandit!
Jeff White
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When Resistance Becomes Support
September 11, 2012 at 2:25 pm
Levels on a chart become more valid with every touch. Whether it’s a trend line or a lateral level, each time price respects it, it adds credibility.
One thing I watch for frequently is for lateral support/resistance levels, and specifically when they’ve flip-flopped their roles. By that I mean a level which had been support which has become resistance, or vice-versa. That tells me that both bulls and bears alike can at least agree on that price area being important.
I ran across a chart today which is doing this very thing. WDC respected the $41 area back in mid May, then again in late July. The stock powered through that level in early August, but in recent days it has pulled back to find support there. We’ve also seen elevated volume in recent sessions as that level has been tested, suggesting this is indeed an area of contention.
Since the peak more than three weeks ago, a descending trend line off the high has also emerged. Currently that trend line and the $41 key level are starting to compress price. A resolution one way or another should set the stage for the next move.
Given that the intermediate term trend is up, watch the descending trend line for a possible break, currently around $42.80 (it descends daily). That may deliver some upside pressure back toward the high near $46.
The $41 level would be the natural zone to watch for a failure, but on a reward-to-risk basis that only offers about 2 to 1. That doesn’t qualify for me for a swing trading candidate, but the chart nonetheless is worth pointing out as it gives such a good example of a key level playing a role from both sides of price.
Here’s a closer look at the chart of WDC for you:
Trade Like a Bandit!
Jeff White
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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
Subscribe to our Stock Pick Service to get our trades.
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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5 Ways to Dodge Doubt in Your Trading
July 17, 2012 at 10:28 am
“Quite some time…I been sittin it out…didn’t take no chances…was a prisoner of doubt.” – Straight On (Heart)
In a previous post, I covered some of the steps necessary to recover from deep trading wounds and what it involves to start moving past the pain and toward progress again.
Taking a big hit in your trading often sidelines you, either literally or (even worse) mentally. I know from experience! And while there are times to take a break in order to avoid doing further damage, at some point, you still have to get back on the horse and overcome those doubts.
But how do you go about doing that?
When your account and confidence have taken a sizeable reduction, there’s a ton of doubt to get past, so let’s look at 5 ways to do that.
1.) Take it down a notch. And you know exactly what I mean. When you’re starting out or starting over, you have to start small. Small enough that it’s all about the process and not the result. By doing this, you’re setting the tone for growth again, you’re respecting the market, and each trade takes on minimal significance while you’re getting back into the right habits.
2.) Get specific. By narrowing your focus to that which you should be doing, by default you can eliminate much of the fear you may be facing, as well as a lot of the trouble which comes with a fly-by-the-seat-of-your-pants style of trading. Without a game plan, you’re playing the guessing game. Understand which conditions you’re facing, and go with the strategy best-suited for those conditions.
3.) Set realistic expectations. As much as you might like to, don’t expect to make it back right away. Big expectations may be what got you in trouble to begin with, so curb your enthusiasm a bit and aim to just get the bat on the ball first. The idea is to start a foundation which can support bigger and better results, but right now it’s first things first, so look to start small.
4.) Keep risk in check. As noted in the point above, you can’t just go swinging for the fences. To avoid that, have a risk per trade amount that’s appropriate for the fresh start you’re making. And be careful with how many positions you’ll carry at once, at least until you’re back in the flow.
5.) Hit singles. Early on, the aim is to get on base and establish a rhythm of success that can be built on. By selecting high-probability setups with defined risk, you’ll increase your odds of getting into that rhythm and start marking some results in the black – just what you need the most.
** What are some other ways to get beyond fear and doubts on the road to a trading recovery? What has worked for you recently or in the past?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Shifting from Smart to Equipped
June 28, 2012 at 10:33 am
One of the things I love about TheStockBandit University is the opportunity to interact with the traders who enroll in the courses. As they’re learning and asking questions, I have the chance to see the light bulb go on when things begin to click for them. It’s very rewarding.
Recently a trader reached out to share his thoughts with me mid-way through the courses, and I just couldn’t help but share it with you here. This is what he wrote:
“I have just finished the “basic†course. I thought I would have a lot of questions, and I would be pestering you with emails along the way, but I have no questions. You answered them all and many besides. Perhaps, you gave me the skills and confidence to answer my own questions. Something happened anyway.
The “basic course†is very comprehensive. I’m excited now. I have gleaned lots of ideas from your presentation to improve my trading plan.
I’ve been to university, I have a degree in medicine. I can’t remember though, ever coming across such an excellent teacher. I suspect your teaching is spawning leaders in the field rather than followers.
On with the Advanced Course now. Can’t wait!
M.P.
That is so cool. This already smart trader is now equipped – and there’s a huge difference. That’s exciting to me, that the work I put into the courses is paying off for this trader. More importantly, his own efforts in the learning process are rewarding him with the ability to be self-directed in the markets. He’s no longer a slave to a single trading style. He no longer needs the market to do something specific in order to find success.
I rarely share testimonials here with you, but this was one I had to pass along for those of you who are on the fence when it comes to taking the next step toward becoming a self-directed, complete trader. Our stock trading courses are risk free – there is zero barrier to kicking the tires. Enroll today and find out for yourself what it’s like to be prepared for whatever the market throws at you.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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