Chart of the Day: PANW and Relative Strength During Market Selloffs

Today's chart of the day is PANW, which gapped and broke out over it's 50 dma yesterday, and is holding that level this morning.

This makes PANW a relative strength stock. During market selloffs,  it pays to keep a list of relative strength stocks that have the potential to beat the market and will likely be the next big momos if the market recovers.

Check out my 14 tips for handling market selloffs and Bullsonwallstreet.com

Keep an eye on on the 50 dma level. If it holds, PANW is at a good entry level and could retest all time highs.

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Chart of the day: CALA

CALA is a biotech stock that has shown some buying interest while in the midst of a down trend. The recent volume surge has the stock over it's 50 dma, which could start a remount and give it the momentum it needs to make a short term run. This is a speculative setup.
  
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Chart of the day: GOOGL and the moving average remount

$GOOGL cracked $600 in early 2014 and quickly pulled back. Since that time the stock has been consolidating and actually broke below the 50 dma. After a few failed attempts at remount, the stock has gapped up over the 50 dma today. If this level holds we could see a run to $600 and another attempt at breaking out over this key round number.

I am holding $GOOGL in my longer term position trading account and may trade it in my short term swing today.
  
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Yesterday I talked about how to trade VIX in volatile markets. Here is the video if you missed it!

https://youtu.be/avpW0l1NhMU

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Chart of the day: IBB

Today's stock chart of the day is Biotechnology ETF IBB. The pulled back hard taking a number of hot biotech stocks down with it.

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The fact that IBB pulled back hard is a concern for the market since it has been leading the market.

However, the stock is sitting right at they key 50 day moving average level. This could lead to a small reflex bounce even if it does break the support level and start a downtrend. An entry here offers an easily manageable trade with low risk, high reward.

If taking a stab here, make sure to manage risk with a stop under the moving average and a target that gives you a 2:1 reward to risk ratio.

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Chart of the day: HD

Today's swing trade stock chart of the day is HD (Home Depot). In the Trade Report we have been watching residential real estate stocks for a few weeks now and of course, building material and home improvement stocks move in line with real estate.

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Home Depot broke out on strong volume in mid February and has now pulled back to the 50 dma. An entry here in the $112-114 range provides great reward to risk if stop is placed under the moving average with a target at the range high $118 or even a breakout to new highs.

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Today's Entry: GOOG

Today's Entry: DIG

I entered DIG today. The stock has broke out over a W formation and the 50 day moving average. Another positive is the positive RSI divergence.

An entry here around $34.80, with a stop at $33.80 (under suppport) and target at the old high around $38 offers a nice 3:1 reward to risk ratio.

The stock is a bit overbought. Ideal entry is on a little more of a pullback.

Trade Entry: AMZN

I entered AMZN based on 1) the oversold stochastic reading and 2) pullback to the 50 day moving average. There is not credible chart pattern, but risk is low and the two elements listed give a slight edge.

Stop is below the moving average, around $129. The intital target is $140, followed by $145.

FCX and PCU: Great Long and Short Setups

PCU and FCX are on fire. Technically, they look great on a pullback to support for long entry. However, they are very extended. Take a look at the distance from the 50 day moving average. I think we are due for a snap back. I will likely short on more strength.

Anatomy of a Successful SPY Trade - Moving Average Oversold Bounce Setup

This setup was given to Trade Report subscribers. SPY was marked as a "bounce trade" setup on Friday as it neared the 50 day moving average and became short term oversold using stochastics as the oversold indicator. I entered Monday morning on confirmation.

The stop was set under the 50 day moving average, with an initial target of $106--giving 3:1 reward to ratio.

The stock is now near resistance. Notice the distributive volume pattern. This suggests failure at resistance. Entry in the $106-108 range offers a decent short setup.



Note: I used SSO (leveraged SPY ETF) as my trading vehicle, but am using SPY as the example since more people trade with SPY.

Key SPY Support Level

SPY is nearing converging support levels and oversold stochastic levels. A low risk opportunity may present itself near the 50 day moving average.

Take note that the volume pattern is showing distribution.

X: Low Risk Setup

X provides a low risk setup as it pulls back to the 50 day moving average. If the market tanks, X will go down with it, but losses are easily managed at this level.

5 Profitable Energy Charts

Here are 5 interesting energy stocks. I've included longer term charts. Each has a slightly different pattern and can be played in multiple ways.

RIG (Transocean, Inc.) is looking good right now. We've got a support converging at both the breakout point and the 50 day moving average. My only concern is there doesn't look to be heavy accumulation right now. Still, it might be a good low risk play here.



SWN (Southwestern Energy Co.) has been trending and shows a nice accumulation pattern.



DNR (Denbury Resources, Inc.) is the most "iffy" of the group. The trend has been up and down, but if you can catch the right bounce, it has been profitable. It's pulling back to the 50 day moving average.



APA (Apache Corp.) has been trending along the 50 day moving average and shows decent accumulation.



ARD has been digesting some major gains, but could be a nice play around the 50 day moving average.



I see some low risk, high reward plays here, as long as the entry is timed correctly.

Primary Watchlist for Wednesday

Here are six of my favorite long candidates: VRGY, HEI, JCG, CYNO, OII, MT. All are trending stocks with nice pullbacks. While these are short term trade opportunities, MT and OII (two of my favorites in their respective sectors-steel and gas equipment) will be buys for my longer term position trading account if they pullback to the 50 day moving averages (red line).

I define a short term trade as anywhere from a few days to a few weeks, while the time frame for position trades is a few weeks to a few months.