Mar 22 TA

Another week of probable chop ahead, my sentiment is bullish so long as the spiders trade above the 1150 level.  A pullback to here on Monday and I might be looking to catch some longs.  Much of the charts I’ve been looking at continue to hide away from any solid technical analysis – I have reduced both watchlists by about a half and have only found another 3 new tickers to phase in.

Alcoa short term ascending triangle

Nice setup here to the long side on AA.  Broke out of a short term ascending triangle last week and has remained above the new support level of $14.  This is also trading with the 50MA having broken out on good accumulation.  I am looking to enter this between $14-$14.125, although we might have seen the last entry in this range with a nice surge from the new support on Friday.  The ascending triangle price target is at $15.80, however the past 3 sessions have rejected $14.75 heavily.

This setup is quite a short term one and offers diversity to a swing portfolio.

Hi-ho silver. Another long setup

SLV is looking to provide a trade to the long side this week.  Having bounced nicely in the past 8 weeks this has formed a consolidation phase above an S/R line at $16.50.  My bias here is to the long side based on this consolidation (bear flag) formation, as well as the herd-menatlity of the 50MA.  What I don’t like is the proximity to trend overhead and the failure to grind out a second high (which is kind-of ok during tight consolidation).  The volume in this area doesn’t impress me too much either.  On a good day for precious commodities and a solid day for the internals next week, I would be looking to get in long at this price with stops around $16.37 with a price target of $18.50  initially.

I would only look to short this on a breakdown and subsequent retest at $16.50 as resistance.  The support areas are quite large here, which means targets aren’t as accurate.  A bounce from $16 on tiny accumulation into $16.50 following a high volume breakdown would be a great indicator to the short side.

Jagged little PLL

PLL has been on a good uptrend in the past year (well, what hasn’t?), consolidating nicely before breaking to new highs.  It’s these rallies I like, as they provide clearer support and resistance areas and therefore trades than your parabolic up moves.  After hitting long term overhead at $42 recently, this has sold off and created an island top after gapping up and then down.  The setup at the moment to me looks like a bear flag – this gradual tight move up from support (as opposed to a nice bounce based on solid and keen accumulation).

However, like most good technical setups (all of them tonight), it offers a trade to the long side at the same time.  The reason why this drop to support is quite good to the long side is due the the high volume on the initial breakout, the low volume during the sell off as well as the 50MA yet again looking to support this price level.  How will you know which way to trade?  Volume would be my primary indicator – as well as intermarket analysis.  Watch the indices to see if they look bullish, watch the sector strength and the internals.  If things look bullish and this breaks above $39 on good intra-day volume my bias is long.

If things look weak and this gives up the $38 area on selling and closes below, then I am bearish.  In terms of targets, to the long side I’d be looking for $42 and potentially new highs – all the while being cautious of the gap area offering overhead.  Short targets are in the $34-$35 support area with rollover potential.

I am also watching AIG on a bull flag setup & VMC on flag/asctri breakout/support pullback.  I have updated my current watchlist, which you can find on the upper right of this page.


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