After reviewing over 1,000 charts, I have found some good setups for the week. This week’s list contains the first five below to get you started early. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into Memorial Day Weekend, the unofficial start of summer, sees equity markets remaining in consolidation.
Elsewhere look for Gold to possibly confirm a reversal higher while Crude Oil pulls back hard in the uptrend. The US Dollar Index looks to continue to move to the upside while US Treasuries race higher in the short term. The Shanghai Composite looks to have resumed the downtrend and Emerging Markets continue to hold over support, marking time.
Volatility looks to remain at very low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Despite that good news equities continue to plod along sideways mainly. The longer timeframe remains constructive with the IWM leading in the shorter timeframe but the QQQ looking to catch up. Use this information as you prepare for the coming week and trad’em well.
Ashland, Ticker: $ASH
Ashland, $ASH, moved steadily higher from September to the end of January. It stalled there and rounded down, eventually finding a bottom at the beginning of May. It confirmed a Hammer reversal with a gap up and continued to the beginning of last week. A Shooting Star then confirmed a top and it pulled back in a bull flag. Friday saw it break the flag to the upside with a target on the move to 82 conservatively, possibly 90 if measured from the Hammer. The RSI is overbought but rising and the MACD flat after a big rise. If this triggers you want to take profits fast. There is no resistance above 79.20. Support lower comes at 77.50 and 76 then 74.30 and 70. Short interest is elevated at 6.0%. Enter long on a move over 79.25 with a stop at 77.50. As it moves over 80 move the stop to break even and then to a $2 trailing stop over 81.25. Take off 1/3 on a stall at 84 or higher. As an options trade consider the June 80 Calls (offered at $1.90 late Friday) and trade them like the stock trade (using the stock price as a trigger, stop and target). Sell the June 85 Calls ($0.80) to lower the cost.
BlackBerry, $BB, started to move higher out of a broad base in April last year. After three steps higher it topped in January and pulled back. In April this year it found support at the same spot that propped it up in November and December. It started higher in May and then pulled back in a bull flag. Friday it started moving out of the flag, giving a target to 13. This would drive through falling trend resistance and make for a higher high, defining a reversal. The RSI is rising in the bullish zone with the MACD flat but positive. There is resistance at 11.90 and 12.25 then 12.60 and 13.33 before 14.50. Support comes at 11.40 and 11. Short interest is elevated at 8.1%. Enter long on a move over 11.80 with a stop at 11.40. As it moves over 12 move the stop to break even and then to a 50 cent trailing stop over 12.30. Let the stop take you out of the trade. As an options trade consider the June 12 Calls (25 cents) and trade them like the stock trade.
Boyd Gaming, $BYD, started higher in September reaching a peak in January. It pulled back 61.8% to just above the 200 day SMA at the end of March before finding support. Since then it has been moving higher. This creates a target on an AB=CD pattern to 46.50. Last week it filled a gap from February and stalled, creating a short term resistance zone. The RSI is rising and bullish while the MACD is turning up from a flat zone and positive. There is resistance at 37.25 and 38.40 before 40. Support lower comes at 36.25 and 34.15 then 33.15. Short interest is high at 11.7%. Enter long on a move over 37.25 with a stop at 36.25. As it pushes over 38.25 move the stop to break even and then to a $1.10 trailing stop over 38.35. Let the stop take you out of the trade. As an options trade consider the June 37 Calls ($1.05) and trade them like the stock trade.
National Beverage, $FIZZ, started its move to the upside in January 2017 and continued until September that year. It pulled back from there, retracing 50% of the move higher, before finding support. It has bounced along over support there since March. Friday saw it move up to resistance with the Bollinger Bands® expanding. The RSI is in the bullish zone and rising with the MACD crossing zero as it moves up. There is resistance at 92.75 and then 99.25 before 102.60 and 106.60 then 111.40 and 114. Support lower sits at 90 and 86.25 then 84.50. Short interest is high at 22.6%. Enter long on a move over 92.80 with a stop at 90. As it moves over 93.80 move the stop to break even and then to a $2 trailing stop over 94.80 and let the stop take you out of the trade. As an options trade consider the June 95 Calls ($1.80) and trade them like the stock trade.
Medicines Company, $MDCO, printed a double top in March last year. The drop erased over 55% of the company’s value at the low point in January. It pushed higher from there but retreated again in March. This time to a higher low at the beginning of May and bounced. It paused 2 weeks ago at the 200 day SMA and then Friday broke to a higher high. The RSI is rising and bullish with the MACD rising and positive. There is resistance at 33.40 and 34.75 then 36 and 37.50 before 39.40. Support lower sits at 32.50 and 31.15 then 29.85. Short interest is high at 27.3%. Enter long now (over 32.50) with a stop at 32. As it moves over 33.50 move the stop to break even and then to a $1.25 trailing stop over 34.15. Let the stop take you out of the trade. As an options trade consider the June 33 Calls ($1.50) and trade them like the stock trade.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.