Today’s Featured Swing Setup.
Starting this week, I’m going to launch a new blog series called “Swingers Daily” (may change the name if I come up with something better). The idea is to feature one quality swing setup on a daily basis. This will not replace my watch list. Instead, this will allow me to provide what I think is a technically strong setup with details around entries, exits, etc.
I hope this proves useful to you – especially those that are unable to participate in the chat room during the day.
Today’s Feature: Qwest (Q)
Beta: .8 – low beta play and makes Q a lower risk trade. However, you’ll not likely see a big boom… it’s for those of you looking for a little more stability and predictability.
Short Interest: 7.97% – low short interest… so don’t expect a short cover run up. However, no one wants to bet against it either.. so, swings are in play.
A look at the charts:
Q daily chart shows an obvious top forming and heavy resistance just under $7. However, SMA20 has been offering great support and Friday saw a bounce off SMA20 with a strong reach higher. The only concern is the candle busted through resistance but failed to hold above. However, overall, the indicators are still bullish.
Below is the Q hourly chart. It’s all about the close.. horizontal resistance as broken on good volume.
Here is how I would consider playing Q..
First, I want horizontal resistance taken out before I position long. This gives us an entry at 7 or 7.01, to be on the safe side. If it gets over $7, there will likely be some twitter buzz and more buyers.. watch for it.. If the move through resistance doesn’t include strong volume, it could be a head fake.
After entering, I would place SMA10 (daily chart) as my stop.. possibly SMA20, but not below. It’s important that SMA10 stays above SMA20 or the positive momo may be lost and it’s time to exit. As a swing, I’ll likely adjust my stops to correspond to either SMA10 or 20 on a daily basis. If the price moves strong above both on some kind of breakout, then I would place a trailing stop % – no need to hold on to a pullback all the way to the SMAs.
I hope this helps. Let me know if you have any questions and I’ll post a message out if I decide to swing.
One last thought.. Even though I’m looking at Q as a swing, that doesn’t mean it has to be held for days. If it shoots up 5% in one day and pushes out of the top of the bollinger bands, I’ll take my profits then and consider it a day trade. It’s basically a swing until it’s not 🙂