April 20 Session Review & TA

The market continued to the upside today, with a raft of earnings both pre and post market buoyed trader sentiment to the longside.    Market internals were bullish all day, with the futures closing a morning gap before reversing to the upside and finishing the afternoon in a narrow consolidation band.  The ES futures showed better strength than the YM today, offering 3 trades today – 2 to the longside and 1 to the short.

Futures action

I was watching the pivot points a little closer today, with R2 on the ES the most relevant today.  It helped that this level was also recent overhead.  After closing at highs, I’m looking at the 1205 level to act as support tomorrow, with overhead at 1210.  Given the unrelenting strength of earnings, my outlook is to the upside tomorrow.  Any jitters with a pullback to 1194 offers the lowest risk longside trade at the moment.  Breadth closed at +4.454:1, A/D on highs at 1901@+4.255:1.

Trading wise, it was a pretty much a sit on hands day.    VMW sold off a little, but then caught a strong bounce before closing a little off highs.  This also beat earnings after the bell, without any significant follow through – it remains positioned nicely for continued gains so far as it trades above $55.  I had little fear of a haircut here on earnings given that earnings have been good across the board, starting with IBM.  I remain positive about this position.  CTAS didn’t perform too well today, while this setup is still strong – the lack of follow through momentum here is a worrying sign, and I may cut this trade soon.

Some technical levels for the coming few sessions:

MI continuation

MI broke recent swing highs today on some solid accumulation, closing the day up over 10%.  Looking for a pullback into $9 to get long this stock.  Having recently broken a symmetrical triangle, I am bullish here to new yearly highs.  Stop at $8.90 with targets near $11.50.  I’ll only post the MI chart as the rest have either been covered in the past week or only need a price level:

  • VMW forming a rectangle with support at prior resistance at $55 and highs at $58.  Bullish and anticipating new highs.
  • KFT short term trading range of $30-$31 which represents long and short entries with $0.20 stops.  A pullback into $30 again will coincide with the 50MA, watching for a surge in buyers to take it out the range to new highs.
  • HBC trading range $50-$55, with a $5 measured move either side of these levels.  Broken medium term resistance line so bias is slightly bullish here.
  • SHLD still tradable between $05-$110, high beta last few days so be nimble.  Watching for close above $111.50 or below $105.
  • Looking to short GME near $26 depending on market sentiment at the time, has seen immense accumulation lately and feels extended at these levels.
  • DNB a short setup running into gap fill and prior double bottom support at $78
  • LO a short term trade on a pullback to ascending triangle resistance, now support at $78
  • MMM offers a low risk trade to the longside for $2.50 on entries at prior double top resistance of $85

Should be an interesting week.  I’d really like a rest day or two, or even a slight sell-off to give these trades a more implied risk reward ratio.  Most of the stocks I’m looking at have broken resistance, but don’t offer value until a slight pullback – I don’t like to enter trades with too much downside potential that conflicts with my trading rules, despite still looking good.

I’ve also been tinkering with the TOS scripting platform, if I get any decent code sorted I’ll post it here.

Evening update:

Spent the past few hours messing around trying to learn the thinkScript coding syntax.  Bit of a hassle at the moment to get it all sorted, and I’m not entirely sure what I’m going to do with it when I learn it.  Anyway I finally figured out how to code some simple labels.  They basically shows how far the stock is trading off highs or lows as a percentage.  At the moment it only works on the daily charts, but I have use for these values in intra-day futures charts.

Set it up

Incidentally, here is the setup I’m looking at on LO – a breakout through an ascending triangle – however I don’t like the lack of volume in this move.  There is good upside to $84, but I see overhead at $82.

I’m also looking at getting the same sort of box, but using a percentage above or below volume for the past X sessions.  Good for gauging rates of change, particularly in bull flag setups.  I found a similar script online that plots average volume as a cloud on intra-day charts, which might be useful.  I’ll post the links up here when I stop coding.  The types of scripts I’m looking to make revolve around market statistic divulgence, and are not trading indicators (cuz you don’t need ’em!).

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