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Every trading day, the ShadowTrader Focus List provides you with detailed trading ideas that have defined entries, defined stops and defined targets. Each issue contains 2-5 plays daily with full chart annotation explaining the rationale behind the setup. Stocks that are in focus may contain new breakouts to 52 week highs or lows, trendline pivots, pullbacks to moving averages, strong consolidations that are "building up steam" for a future move, or other technical events that foreshadow impending price action.
Additionally, each issue of the ShadowTrader Focus List always includes "The Big Picture" which gives a heads up on key technical levels in the broad market and a short term bias outlook. ShadowTrader feels strongly that the highest probability of a trade moving in the desired direction happens when the entry is correlated with pivots in the broader market which provide added momentum.
Good Morning, Traders. A slight gap up on Tuesday morning on no economic data eventually faded hard into the close and left the major averages red once again. The Dow lost 26.98 (closing within 100 points of 11,000), the S&P was down by 5.49, and the Nasdaq Composite shed 14.09 on the heels of some extreme weakness in the $SOX which was down 1.62% from its open. We discussed weakness in the $SOX in yesterday's Big Picture commentary. Although a lot of indicators are starting to read oversold, we still have not broken trend in the major averages. The chart above of the Dow clearly shows that the downdraft which began on May 11th is still not broken. The blue line which connects the highs from that date is clearly still unbroken. Only upon prices piercing this line to the upside and holding for at least a few hours will bears see any need to begin to cover their positions. Although the outlook here is certainly bearish, the Big Picture cannot advocate getting majorly short just yet as any break of the blue line above could provide a relief rally. Market remains in a short term holding pattern as earnings season is drying up and investors are wondering what the next catalyst will be to push prices in one direction or another.
For questions or comments regarding the ShadowTrader Focus List, email to focuslist@shadowtrader.net
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CERN - Cerner Corporation
Industry - Software
Side - Short
Trigger - 37.10
Stop - 38.10
Target - 35.00-
Timeframe - 1 - 3 weeks
Notes
- Stock has recently broken a 50% Fibonacci retracement from prior stage move and looks to be headed to the 61.8% retracement level which is currently at 34.24
- Low volatility recently offers good risk reward if stock breaks downward
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UPCS - Ubiquitel, Inc.
Industry - Telecommunications (Wireless)
Side - Long
Trigger - 10.50 / 10.68
Stop - 10.25
Target - 11.25+
Timeframe - multiweek
Notes
- Offering two trigger areas for scaling in
- First entry is over yesterday's high, second is actual breakout which is safer
- Stock is showing a lot of relative strength as of late by not breaking down with broad market
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