April 28th, 2016 Watch-list
Evening traders! Interesting day for the overall market as we saw both the DJIA and SPX in the red before the announcement of a push back to June for a potential small rate hike which pushed the market in the green. Here's the bigger picture when it comes to the FED and the market...what we've seen happen is our market become incredibly inflated due to the fact the fed has kept interest rates so incredibly low. Now they're in a tough situation where they've inflated the market so much even a mention of an increase causes a major fall. Both of the big pullbacks we've seen in the past year are directly related to the Fed and interest rates. If they raise rates too fast, the market will collapse and the economy will probably enter a recession. If they try and not raise rates they'll only make the problem worse. So, all of this is simply them trying to get themselves out of a mess they themselves created. By slowly raising rates and allowing the market to internalize each rate increase over a 4-6 month period their hope is they can minimize the damage to the market. Whether that will work has yet to be seen. Both the DJIA and SPX daily and weekly charts are below for review. We're still right up near key resistance levels on both charts. If we can hold above 18000 for the DJIA, lets continue to watch that 18351 high from last year as the next key resistance level.
Current Below $20 Plays on Watch:
MNGA: Nothing new with this play. Still hanging out right above that 20sma. For those who need to free up capital for other plays, don't hesitate to exit in this level. For those who are ok staying in, have your stop loss moved up to within 2% of your entry price to reduce risk.
AHT: Nothing new here. Still waiting for it to enter buy range.
NLS: Nothing new here. Still waiting for it to enter buy range.
DRIP: Still seeing this high risk/reward play head lower. As we've discussed, with the risk involved, we need to see a 3/4 sell signal on USO and a 3/4 buy signal on DRIP before taking an entry in DRIP.
KNDI: This one is presently sitting right above our buy range. Hoping we can close out the week red and see this one make the move into our buy range.
FRAN: Essentially even for the day on this one. Did see a small pop yesterday making an entry tough. Hoping to see a small pullback on this one to provide an opportunity for others to enter the trade.
Current Above $20 Plays:
TZA: Seeing this one drift down slightly the past few days. Make sure to have your 1/2 stop locked in if you are in this trade. Hoping we can see this one turn green tomorrow. $40 still the next key break moving forward.
New Below $20 Play:
WYY: Interesting technical set-up occurring here. As you can see below, we do have an ascending triangle occuring with the key break, in my opinion, being $0.75. A break above that could send this one up into the .80s. As we've talked about time and time again however, breakout plays tend to have a lower win %, but when they do run they generally run strong. So, with that said, if you decide to enter on a break above 0.75, have a tight stop set of roughly $0.71. If we do get the breakout, we'll target $0.83 as our initial target for a potential 10% win. If the breakout fails or we don't receive a break of $0.75 and we pullback, we'll look to target this one as a potential support reversal play in the labeled buy range below.
