Stock Chart of the Day: TK

One of my favorite swing trade setups is the breakout-pullback setup.  This trade is also great for part-time traders since you don't have to monitor it tick by tick and have easy stop and target placement.

Today, TK broke out strong out of a 3 month trading range on very high volume.  For the next few days I will monitor the post breakout range that develops and look for a good pullback entry.

Stock Chart of the Day: SPXU

Almost every swing trader watches SPY for market direction and for swing trades.  However, you need to load up on SPY in order to make money off it's moves.  For that reason, I like to trade leveraged ETFs, which give us more volatility, and volatility is what we want as swing traders.

Recently I went short SPY via inverse ETF SPXU.  You go long this inverse ETF, which has the effect of shorting SPY.

Let's take a look at the chart.  The stock has made a nice run right up to the 50 dma after being severely overbought.  RSI has picked up, which leads me to believe it can break the 50 dma and hit at least one of the two targets above, the early August breakout at $48 or the pivot high at $51.

Note that this is the exact inverse of what SPY is doing.  So our analysis of this chart tells us that SPY still has room to pullback.  I have set my initial target at $48, where I will take half off and move my stop up to entry level.  My next target is $51.

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Today's Stock Market Review and Game Plan

On Friday I talked about how strange this market has been, especially for swing traders.  In that vein, today did not disappoint.  We were expecting either a continuation of the pullback or a light bounce.  Instead, to the surprise of most, we got a strong bounce.  For the first time in quite some time, breadth was actually decent, with  240 of 500 SPY  stocks beat the .78% gain in SPY.  I am still not seeing a lot of strong breakouts, but today was still an improvement.

One day does not tell us a lot, especially in this whipsaw market.  However, if this type of action continues, it will give us the underlying momentum we need to see a big run once new highs are hit.

I am going to continue to play it safe and take on fewer positions than normal.

This is an excerpt from the Market Speculator Part-Time |  Swing Trade Report I published today.

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Stock Chart of the Day: ZU

Trade Report focus list stock ZU broke out of a post moving average remount breakout range on strong volume.

This stock has been showing signs of accumulation even before remounting the moving average. This underlying volume support should help propel the stock to recent highs around $42.  I will look for a good entry on weakness.

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Stock Chart of the Day: BITA

Today's stock chart is BITA, which is pulling back to the 50 dma after reaching new highs in August.   The 50 day moving average could provide a decent bounce as the stock nears oversold levels, though the strength of negative volume is a concern.

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