October 26th, 2016 Watch-list
Evening traders! We're still seeing the market hold within the same range it has the past few weeks, so we're going to go ahead and focus on other things tonight. Below however is the daily chart for the DJIA with key support and resistance labeled. Below that you will find some brief thoughts on our two plays on watch, BDSI and MITK. After that, some thoughts on strategy for the remaining portion of this week.
Current Below $20 Plays on Watch:
BDSI: We're seeing this one stall out a bit up near those two moving averages, the 20sma and the 50sma. In the past we haven't see this one have too much trouble breaking through moving averages, however when you examine the chart you will notice that it does, at times, stall out for a bit before finally breaking them. My hope is we don't settle back down into the low $2.30's and can hold this range until breaking higher.
MITK: Not much new on this one. Still watching for the daily and 15 min buy in unison. If we don't get an entry on this one in the next couple days, we'll most likely remove it from watch due to the fact earnings are coming up.
Strategy for the Remaining Portion of This Week:
With the market acting the way it has the past few weeks, solid reversal plays have been tough to find. With that said, I'll continue to look towards the small cap market for some potential support and basic reversal plays moving forward until we get a clear idea one way or the other for the market. One longer term trade to consider is targeting gold on the short side. With the real possibility of a rate hike in December, gold may end up heading lower as December nears. We've seen gold post a small rally the past week. What I would like to see is 1 more strong rally topside in gold, then we can look to target some plays on the inverse side of things, such as DUST for a move as December nears. Seeing GLD back up near the 124-125 range could be a good initial area for us to look for a reversal. Just a strategy in the infant stages, but I wanted to make sure everyone is aware of my thinking on this. As things begin to materialize, we'll go through and do full chart breakdowns. As usual, if you have any questions, let me know!