Sunday, March 18, 2012

Technical Picture - Uptrend Persists

After a pullback at the front end of March, the uptrend has exceeded the 23.% FE and continues with little hint of a correction any time soon. As long as we hold the HWB level of the current FE (green fibs), we should reach the next target 1420 very shortly.

The only caveat I see is that small caps are lagging as depicted below. A failed BO of the IWM would be a red flag for the broader markets.

Swing trades in play DVN, POT, GLD.

DVN broke out of a long consolidation pattern on high volume. I waited for a pullback to the bottom of the ambush zone. Price had a nice bounce off of the initial entry, but stalled and retested. Now, it is starting to move in the right direction towards a retest of the highs.

As we can see from the daily chart of POT above, it pulled back to the bottom of the ambush zone (50-62% Fib. retracement level) on Wednesday.

On the 15 minute chart below, we entered long on the first ambush retracement after Thursday's gap up. We added to the position on Friday as it flagged after another gap higher. Partial profits taken into the close. Plan to add back on a pullback.

GLD sold off sharply following the last FOMC statement. It has corrected back to the ambush zone on the daily. I'm looking for a bounce half way back to the ambush zone of the counter trend trade (green fibs). After which I'll be looking for a short.

The 15 min. chart below, shows the initial entry, stop below red line.

AAPL is extremely extended. It has breached it BB twice in this parabolic move higher. The first breach was met with a quick shallow retracement to the ambush zone, and we appear to be doing the same again on the second breach. A failure of the ambush, could see a deeper correction back to the rising 20 MA.

John Bollinger talks about the Three Pushes to a High pattern in this month's issue of Stocks and Commodities magazine. This pattern suggests that the next time the BB are breached within this uptrend, AAPL will be ripe for a full HWB (half way back) from the October high to high.

N.B. Apple will disclose its plans for $100 billion cash reserves tomorrow at 9:00 AM EST. NQ futures have rallied to new highs this evening.

1 comment:

algo-mentor said...

After solid lift ( ) I would like to think we are soon out of gaz :)