Yesterday I shared a number of potential trade opportunities.
These had all tagged or were approaching their primary support levels. Today, we’re going to see how they reacted to support and if we received confirmation.
Let’s review the potential opportunities on yesterday’s blog…
*Head over to the website and full article for all the charts! See the charts here.
Schwab US Aggregate Bond ETF (SCHZ) weekly
Price opened and closed below support on Monday. This is bearish. We were looking for a bounce not a dump. Don’t buy it.
Goldman Sachs (GS) weekly
Price traded up through resistance. This is bullish. Probably not getting a pullback this week. Don’t sell it short.
Vanguard International Bond ETF (BNDX) weekly
Price broke trend line support and is approaching another support level at 54.19. Continue to monitor.
Facebook (FB) weekly
Price broke support on Monday. Bearish. Don’t buy it…yet.
Social Media Index ETF (SOCL) weekly
Price broke support on Monday. Bearish. Don’t buy it…yet.
Post Holdings Inc (POST) weekly
Price is sitting right on top of trend line support. Wait for the bounce.
Dow US Telecommunications Sector ETF (IYZ) weekly
Price bounced off support. This looks like a good entry point with risk below the trend line. I’m putting this on our buy recommendation list.
Belgium Index ETF (EWK) weekly
No bounce yet. Traded slightly below trend line support on Monday. Monitor.
Alibaba Group (BABA) weekly
Price traded below trend line support on Monday. We might get an opportunity at a lower support level.
So, you see how it’s so important to wait for confirmation. You can buy at support when it’s first tagged but in my opinion that is jumping the gun. Of course you will get a better price but you don’t have the confirmation of support or resistance rejecting price.
I like to see at least a few days of support or resistance rejecting price for confirmation with individual equities. With a large ETF like SPY I look for approximately two weeks of confirmation.
I thought I would go through the process I follow so you can get an idea of what I look for. I am automatically alerted when price tags the framework I have built on about 1,000 stocks and ETF’s. I review every one and monitor them for confirmation. Then, I send them to you.
If you have any questions I would be happy to answer them.
Trade Smart,
Don