I’m not a pessimistic person, but I do believe this week deserves a cautious approach to trading.. especially for those of us who have been dabbling in highly volatile stocks under a buck.
Why nervous feet?
For one.. it’s options expiration week – basically means increased levels of volatility are likely and I personally think, a small sell-off.
This is also a week packed with economic news – any of which could move the markets. Check out the busy calendar on Bloomberg. But, don’t just look at it, create some trades around it. There are numerous stocks you could position into based on the housing starts report (Thursday) or the retail sales report (Tuesday)… if you have time to trade the momo. I wouldn’t buy before the news unless have you big balls or a crystal ball.. play the short term moves after – that’s my approach, at least.
I, however, will not be spending a lot of time trading the next few days thanks to my lovely day job. If I was able, this would be a scalping week (intra-day momentum) with few positions held overnight. Limiting my exposure is key for the next 5 days.
Having said that, here are a few stocks I’m watching for possible scalps/swings if we see momentum to the upside (these are all long setups).. I will only take positions in those that breakout and not until then. I’m not buying the setup.. I’m playing the move only.
- URRE – Of course we’ll have to see commodities move to the upside to offer segment strength, but I like the chart. Nice triangle with test against MA50.
- MI – On a strong move through MA200
- CEGE – Give me a move out of this triangle and I’ll go long (close stop, as usual).
- WAVE – Time to catch the wave? Again..only on the move out of pennant.
- SONS – I’m watching for action against 2.15. Over would signal a horizontal resistance breakout.
- CHINA – Looking for continuation move through MA20 Monday.
Have a great week, all, and don’t forget to stay close to your trades – volatility will likely be up and there are a lot of nervous trigger fingers ready to sell right now. I’ll be one of them if any of my positions fail to move (CYCC and PVX).