Hi Everyone
Strong Bounces off Support
A very positive week so far for the leading averages and several leading stocks OVIs have even bounded into positive territory.
However, let’s not get too carried away just yet. If we’re going into a bull run, what we need from here is for some patterns to start building up with the OVIs remaining above water. If we’re going up from here, then it’ll be bull flags we need to see more of.
Earnings season starts in a couple of weeks and in a bull market it’s not unusual to see stocks making a run-up at this time. The thing is, we’re not in a bull market, so stocks that do make a run-up will be selective.
Talking of patterns, in my last PTC Webinar I mentioned a bunch of Bear Flag candidates all of which either made money or didn’t lose because they didn’t actually break out. These stocks included: ACET, AFL and AUDC. These were just simple flag examples.
Now a quick look at the charts:
QQQ
A really strong bounce over the last three days. It’s going to either pause a bit from here, or go straight back from whence it came! For now let’s hope it’s a pause followed by another strong surge.
SPY
Similar story with the S&P which touched its 200-day moving average and then surged upwards.
Now for a few interesting stocks to consider.
AMZN
A great move from the consolidation from $195, and now the stock is right at May’s resistance with a positive OVI. In an ideal world we’ll consolidate and form a flag here. But it may not wait. Any buy point would be above May’s highs, and use a trendline to manage your trade.
BIDU
Also looking good. A move above $140 is the entry point and again, use a rising trendline to manage this one.
NOV
This one has broken out of its base already, the OVI is positive. Now it needs to pause for a couple of days to set up the next move up. A bull flag is what we want here.
For the next few weeks we’ll have to be on guard for earnings – we’ll monitor the market’s mood regularly during this time.
More soon.
All the best
Guy