Have you noticed that there are SO many stocks hanging out around SMA200 right now? The congestion is worrisome, but still offers a light of hope that we may rebound back up this week.


Why the worry? First, look at the S&P 500. For a while after the Flash Crash, SMA200 offered support. Since then, we’ve failed to move through SMA200 resistance 3 times. That’s a struggle we have to consider. If some of the large caps start falling below, you could see quite a sell off. 


However, on the flip side, MACD and Slow Sto are both turning in favor of the bulls with MACD near a positive cross. It will likely take this cross to push SPX north of SMA200. At that point, I would expect to see buyers.

 Here are a few stocks showing up on my swing long scans this morning.


(requested) – opinions on stocks that people have asked me about lately.


MU – Currently experiencing a lot of congesting around SMA200. Two possible trades here: one just above SMA200 with stop below and two, wait for the breakout above horizontal resistance at the 9.50 range


CVS (requested)– Swingable setup on move through SMA100. Volume is strong with improving MACD. What I’m looking for here is a new uptrend in a relatively ‘safe’ trade that can be exited quickly if need be. I’m not interested in holding under SMA200, so I’ll wait to confirm it holds before I consider the swing.


IBM – see CVS.


LVLT – This is an interesting chart, but you need to look back to see why. LVLT has a history of consolidating down and then popping up for big gains. In this chart , notice the blue upward channel containing numerous pullback/consolidation periods. Each one of these is followed by a nice bull move to the upside. Did we see the first signs of moving out of this consolidation pattern on Friday? Possibly. This is a risky trade, but a swing could work out well if the market holds.


SBCF – Watching for move through 1.90 horizontal resistance. Possible swing above, but banks make me a little nervous right now, so I’m more likely to use 1.90 as a possible scalp above.


BGP (requested) – Sitting on SMA200. Needs a bounce from here for possible swing. We might want to wait a day or two to confirm support before swinging long.


MPEL – Watching at horizontal resistance and SMA100. Strong day on Friday, so we’ll need continued volume strength Tuesday before considering a long position.


Overall, there are not a lot of good-looking setups to the long side. The charts indicate a choppy day with a bias towards moving lower. Stay nimble and careful with swings.

See you in the Boom Factory.





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