It looked like the bulls were going to stage a rally this afternoon but that attempt got squashed just as quickly as it started. The result was more than 2% losses on both the S&P 500 and Nasdaq. Still, the mid-day bounce is encouraging since it shows that people are at least attempting to defend those nice round numbers of 900 and 1,600 on the indices. Both indices now have oversold short-term stochastic readings, so that’s another thing working for the bulls in this range-bound environment.
You know things are bad when one of the best charts is an airline stock. Delta Air Lines, Inc. (DAL) looks pretty good here after its pullback to moving average support on decreasing volume.
If bottom fishing is your thing you may like the next two charts. The risk/reward on Google Inc. (GOOG) looks pretty good here. It made an NR7 candle today, so that gives a nice, tight range to trade against (buy above, stop below) which also found support at the nice round number of 300. Today’s action looks like the market gunning for stops under the October lows. I’d like today’s candle even better if it had gone under 300 to trigger any stops in the high 290′s…
The setup on Coach, Inc. (COH) is similar to GOOG’s — and there are a lot of other stocks in similar positions. If the indices head back toward the top of their ranges these could get popping pretty quick.
no changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Down |
| Intermediate | Down | Down | Down |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Was it that long ago when GOOG was over $600? Oh how times have changed!
Hi Mike,
1) I am trying to create a stochastic similar to the one you present on your graphics, but I cant manage to get the same values as you do. Do you just use K=5 and D=3? or is there anything else that I dont see?
2) What method do you use to filter the stocks/ indexes to watch closely?
Thanks
Renato,
The stochastic setting are 5,3,3 (Period:5, SK: 3, SD: 3).
I think these two posts will answer your second question:
Swing Trade Setups & Scans and Filters I Use to Create My Universe of Tradable Stocks