14 May Free Stock Trade Ideas and Stock Market Forecasts Report
A few weekends ago we said the SP 500 “needs to thrust” out of that triangle pattern, as did Biotech. In the past two weeks we had a washout overthrow low as a head fake drop, and then the SP 500 and Biotech and markets all finally popped out of the downtrend line wedge. This would seem to indicate shorts finally covered and after the washout we had a vacuum effect on the upside. As we said 10 days or so ago after that drop to 2594 on the SP 500, “All the stops get run and then there are no sellers left, you can get a strong reversal to the upside off that type of washout move”.
“Assuming Major Wave 4 has put in a price low of 2532 now, we can look for 3020 as our Longer Term SP 500 target for Major Wave 5. 2758 near term target”- Dave, Chief Strategist.
Interestingly 65% of the NYSE stocks are now trading above the 50 day moving average line, the low was 15% as we washed out in the early stages of Major Wave 4 to the 2532 area on the SP 500.
SP 500 daily and long term Weekly Chart Views:
Weekly view shows the recent 5 wave triangle we had been looking at for a few weeks: Higher lows and lower highs is classic, usually bullish. Sometimes a “throwever” bottom happens, and we saw that with the drop to 2594 10 days ago or so, which was a head fake and Bear Trap.
Biotech: A few weeks ago we also discussed that Biotech was also at a crossroads and would need to thrust higher, again which it did after a brief double bottom move. We have the XBI ETF here:
GOLD: Hanging on by a thread here and failing to breakout over 1365 still. That said, we remain long NUGT 3x BULL ETF at SRP as a swing trade and are up on the position. Gold still has a chance to break out of this range, some of the recent problem being the strength in the US Dollar. That said, this uptrend line on the lower end looks similar to the SP 500 a few weeks ago.
Swing Trading Lesson: Using Stops near Close of Market- IQ and AKAO
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We have discussed our strategy of using Stops near the Close of the trading day as opposed to intra-day. We prefer this method overall because it reduces our chances of getting washed out on stop loss moves during the day. A volatile day in the market can cause the Algo programs to kick in and the stop losses that are all sitting there get taken out. This can create a “Stock Reversal” set up because the stops are all gone, and some buying or short covering, and or news can quickly push that stock back to the upside.
Many traders spend a lot of time protecting capital but their stops are too tight or they use hard intra-day stops. This means if you take an 8% loss and that same stock reverses 15-20% higher from that loss point, you have to replace your stock you sold for the 8% loss with a new position that rallies 15-20%. Often, its best to sit tight and let the reversal take place.
We review fundamentals and more with all of our Swing Trades so if we get a short term washout we try to hang in there and set strategic stop points. The stop loss on IQ was placed at $16 on a near closing basis for example. The stock dropped over several days from $18.40’s to $15.79 as an intra-day low. However IQ closed over 16 the next two days and we remained in the trade. Days later the stock popped to as high as $23 in a Stock Reversal pattern and we sold out at 19.50 and 22 ranges for 8-25% gains on each 1/2.
IQ Chart Sample Below: Using Stops near Close
Recently we saw similar action in AKAO dropping from 14.70 to 10 area, and within days we sold out the final 1/2 at $13 on another Stock Reversal, avoiding a huge loss. We had an $11 stop near close on that stock and it closed just over that two days in a row, keeping us in the final 1/2 of the trade.
Swing Trade Ideas: 11 Fresh Ideas
Each week we try to provide a list of 8-15 stocks with quick notes which is outside of our actual SRP Trade Alerts, sometimes though we do use a few from this list. Last week PSTG we used and it rallied nicely. This is the current watch list for SRP members to consider on their own or further study, can help save you time.
TAL- Chinese Education provider, 12 week base breakout to highs last week. Strong sector
VNOM- On the list often last few months, nice 4 week ascending base pattern near highs for Oil/Gas partnership
BZUN- Also on the week often last several weeks, 10 week base close to breakout. Earnings due 5/18
DQ- Solar cell wafer maker, 5 week tight base on base pattern, could follow SEDG higher soon?
GOOS- Often on our list of late, 4 weeks tight base near highs, Canadian outwear designer
PGTI- 12 week base pattern, just off highs. Window manufacturer growing earnings fast.
MU- Micron Tech may bounce up here after 8 week corrective base down
SGH- Smart Global turning up as well after 4 week correction, now 2 week ascending base.
VEEV- 10 week base near breakout for CRM provider for Global Sciences Industry
SEND- 10 week correction for this recent IPO. May turn back up, Digital Communication Platform
CPE- 4 weeks tight base near highs for Oil and Gas play based in Western Texas