Setups in a scarce market

The market is doing its bi-monthly “hardly-any-setups” thing at the moment which means there hasn’t been a great deal of good technical charts doing the rounds the past few days.  In times like these it’s best to sit back and preserve your capital and wait for the more premium setups to emerge.  No position is still a position. I managed to dig these out of the Russell 1000 though.  KSU is my favorite by a long shot;

HI rectangle

Watching HI for a breakout of the short term rectangle.  Break below 21.60 for price target of 19.25 with risk at 21.85 for over 10:1.  A more favorable position is a long on high volume break above 22.60 with risk at 22.30 and a profit target in the 25.50 region offering great odds.  These moves are likely to fit into the medium to long-term category in terms of holding duration.  Low risk and clean – watch for participation and candle expansion for trade signals.

CMA key level

CMA is a similar story, also rectangling at key support.  This gap down level as overhead has been tested and firmly rejected in the past few sessions and this has the feel of downside continuation about it.  I would like to be scaling in short here about 37.75 with risk at 40.25 and a first downside target of 38 before longer term objective of 36.  Positioning to target one offers 4:1 with 8:1 on full target.  I would not be looking to buy the breakout above 40 until it has consolidated and pulled back into 40 on low volume which offers a much better risk/reward trade given the gap-fill overhead above 41. A second trade here is on a break below 38 on high volume (and the retest thereof).  In this scenario I would place risk at 38.25 and trail a stop down protecting against a quick bounce from 36.  There is a lack of real lateral support until the 35 range here though.

Breaking out on KSU

KSU looks like a great trade as it breaks a cup and handle and breaks to new highs on some decent volume.  The stock has climbed the stairs over the past 6 months or so having built some good bases below the current range.  The past two months consolidation at highs have provided good lateral support for a pullback into 52.50.  The thin consolidation-at-highs in the past week and a half added fuel to the fire.  This looks likely to hit profit targets/measured moves at  57 – whether or not it pulls back or consolidates before then will be the key to a good entry. In terms of risk, entering right now doesn’t really offer good value so keep this on your radar for the next few sessions and look for a flag or pennant formation.  It is worth noting that there is significant long-term overhead here at 55 and a break above this level  (55.90) will signal all time highs which will really stoke the fire.

What the F is it going to do?

F again.  This has all the hallmarks of a textbook bear flag and it’s hard to ignore the technical elements on this chart which point towards downside continuation.  However, I have a funny feeling this is going to give some traders a run around over the next week or so before deciding what it wants to do.  The only value short is a trade above 16.25 with risk at 16.50 offering 7:1 – I would not enter this trade on ratios below this just in case this catches some upside (as the upside is likely to be severe). As usual, I’m looking for expansion bars on high volume to confirm the move.  Until then, a 3 bar reversal formation would work for me.  As I mentioned last week, the 14.50 area is your place to close and consider reversing as this price offers you more value to the upside than to the downside – a first time retest of a prior triple top can’t be ignored as an entry point.

High reward, wicks likely

HSP looking like a nice short setup at 54.30 on a first time retest of prior descending triangle support range after high volume drop and low volume bounce.  I’m watching this intra-day at the moment and it’s on one of those low volume BS ramp-ups which destroy most traders’ dreams of a logical trade setup.  Logical risk placement is at 54.70 with downside target a slight above 50 to start with – you can work out your ratios from there, but as a minimum I would be looking for 8:1 given the price action on the short time-frame. Let’s see what happens here today.

In longer term investment-type swing trades, blue-chip heavyweights INTC and CSCO look like offering some portfolio value at over 22 and below 18 respectively.

Update; Forgot to include CYN as another consolidation breakout play:

Double top reversal, continuation range?

Sold heavily from double top resistance at 64 and is now forming a nice rectangle with clear cut support and resistance.  I favor the downside and would look to short below 57.90 with risk at 58.25 or by selling the range high at over 59.75 with risk at 60.20.  Look for trend to break, high volume sell off and expansion candles to confirm the move.  Not looking for a long here until 64 is breached.  Downside targets start at 56.

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