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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. Strong day on Thursday but no increase in overall volume :( Certainly one for the bulls however with the Dow taking back almost 200, the S&P just over 26, and the Nasdaq almost 60. Internals were strong all day which is normal on a heavy short covering trading session. Breadth on the NYSE ran 2 to 1 in to the close, while over on the Nasdaq it was an unheard of 14 to 1 positive. Apparently tech issues were being covered in size yesterday. Coal, Miners, and Broker-Dealers were tops on the ShadowTrader Core Sector List. Advance decline lines closed up over +1900 on both exchanges which is rare and notable. When a market is extremely oversold, its quite common for a large part of the retracement to come in one day. Due to the lack of surge in overall volume, the Big Picture classifies this day as a retracement, or short-covering move, rather than a "follow-through day" which is often the start of a larger uptrend. Going into today's trading session, please note the circled areas in the Dow above. They represent prior lows which were major support before the Dow broke down and should now act as resistance into today's session. It would not be surprising if we chopped around a bit at these levels today due not only to the technical resistance above but also that its June options expiry this afternoon. Expecting a rather tight range but as always, trading what we see and not what we think. Traders may want to hold off on initiating positions for swing or position trading until Monday.
For questions or comments regarding the ShadowTrader Focus List, email to focuslist@shadowtrader.net
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FMCN - Focus Media Holdings Limited
Industry - Media (Advertising)
Side - Short
Trigger - 53.90
Stop - 56.21
Target - 50.00-
Timeframe - 3 days to multiweek
Notes
- Extreme relative weakness in this issue as it closed down on a +200 Dow day
- Extremely high volume selloff now followed by weaker retracement move on lower volume
- Two inverted hammers on dailies
- Target listed is to retest swing lows but a broad market that pushes lower will more than likely take this issue into the forties over time
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CELG - Celgene Corporation
Industry - Biotechnology
Side - Long
Trigger - 45.01
Stop - 42.00 / 40.00 / low of daily or weekly breakout bar
Target - 50.00+
Timeframe - multiweek
Notes
- Breakouts are difficult in this enviroment!
- Biotech index has recently broken downtrend of pullback and is holding up better than a good number of other tech sectors
- Stock showing good relative strength last few weeks moving against trend
- Stop points listed are below 20ma daily and weekly respectively; be sure to size appropriately to manage risk effectively
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