Wednesday, November 30, 2005
Issue Contents:
| 09:46 | Swing Trade Setups Featured charts for Wednesday November 30 |
| 10:21 | Futures Trade setup, key levels |
Lets keep an eye on the energy sector today, and be ready to act at 10:30 depending on the report. There are numerous Three Inside Up setups present, many of which have formed after breaking down out of a triangle. Indeed prices may be headed lower across the sector, but this is the sort of setup that often shows up at a sellers trap.
Producers
If stopped long in names like CHK, VLO, XTO, MRO, ECA, PCZ and the like we really need a good close today to be inclined to keep them overnight. Chances are the EIA inventory report at 10:30 will make it amply clear if we even want to be in the names.
Example charts – you’ll find similar patterns in many other names:
APC
VLO
Services
Energy services stocks have of course been performing much better than the producers and commodities themselves; many of these have charts similar to BJS – near testing a range high. We can stalk a potential breakout provided price does not retrace much further. Ideally we are looking for price to break the 2 day high today and close relatively strongly, otherwise we don’t want to be risking capital unless there is sufficient profit room in your position by the close. I like a 1% gain myself, in general, or at least a couple of decent sized 15M swings in between my entry and the closing price.
BJS
Some service names like SLB and SII have much stronger charts – the key risk here we need to be aware of is that if the entire sector fails a test of top so will the strong stocks, often a little faster. But for now these bear stalking:
SLB
SII – if price does not move up and hold up today, we’ll want to stalk a retracement here closer to the 20 period moving average in the days to come.
Current
A current long side setup – minor new low this morning – one stab at a long here with a goal of seeing price quickly rise to break out of the upper edge of the triangle:
A short could also be stalked under the inside bar, not quite at the day’s low. The net long trade will be to stalk a retracement or pause ABOVE the upper edge of triangle, following the first attempt to break out above.
Bigger Picture
YM 15M – a range of 70 – 80 points has set up; if price breaks through we’ll expect to see that distance become the first major target above or below the upside. That would imply a high above 11,000, perhaps a close above 11,000.
YM 135M – sure enough, price logically sets up a target at 10820, roughly 70–80 points below the uppermost range. 10670 will be T2 if price continues through T1.