How I Am Trading Energy: A Short Setup

Swing traders must have a basket of setups in order to trade consistently and successfully.  One of my favorite setups is the "rubber band" short setup.  $XLE is a good example of this setup.

Trade Report members were alerted to this trade when I made it and again when I took partial profits this morning on the gap down. The stop has been moved up, essentially making the rest of this trade a "free ride".  My target now is a retest of the lows.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

Using Sector Analysis For Trades and Finding Good Stocks

Swing traders need to know where money is flowing, and the easiest way to do that is continually analyze strong and weak sectors.  Currently while in the midst of a tough market, biotechnology is breaking out to new highs.  That is where the smart money resides.

There are two ways to play this.  First is to look for a good entry into a biotechnology ETF like IBB or BIB, likely on pullback to the breakout level.  Second is to move to individual stocks and pick a stocks with the best setups for long entry.

I will watch how IBB handles a retest of the old high at $280 for a trade entry.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

Earnings Breakout Chart of the Day: HOG

It is crucial for the part-time trader and swing traders to have a basket of "go-to" setups.  One of my favorites is the "earnings breakout" setup.

Today, HOG (Harley Davidson) posted knock out earnings, which caused price to gap up over a downtrend and the 50 day moving average.  This could be the catalyst it need to test the old highs.

Chart of the Day: TWTR

It's a volatile market for swing traders and just about every index and sector is in a confirmed downtrend.  However, TWTR (Twitter) has held up strong and after two days of weakness has formed a hammer candle right around two areas of strong support.

Hammers near support are often excellent entries off breakout-pullbacks, however in this market I would exercise extreme caution.  I have not even included this setup in the Trade Report.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

Chart of the Day: EXAS

As a swing trader, whenever I see a day that is down big I look for stocks that are breaking out strong.  Today the stock market and just about every stock is getting hammered, but EXAS broke out on strong volume to new highs.  

This is a stock I will add to my watch list and monitor in the coming days for optimal entry.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

Chart of the day: PANW

Yesterday I entered PANW as a swing trade based off the strong closing hammer that printed after a support violaiton.

While the market tanked today, and took just about every stock with it, PANW actually was up slightly.  This market has shown respect to stocks like PANW that have strong price and volume patterns.  This is the type of stock that could really move if and when the market regains it's footing.

The key theme to think about when looking for longs in this market is relative strength.

This is my swing trading game plan

This is my swing trading game plan for tomorrow, excerpted from the Market Speculator Part-Time Swing Trade Report.

A lot of swing traders were caught on the wrong side of today’s move as many thought we were in the midst of another “buy the dip”.  Not us.  While we recognized the fact that dip buying has been the trend for quite some time now, as we talked about, this one felt different.  This isn’t just gut instinct, it’s based on poor volume and price action.

Now that we are starting to see at least a short term trend develop, we can start getting a little more aggressive with out shorts.  While I was still wary of a bounce and only had a “slight short bias”, notice that I ditched entering with only half sized positions for both the $BITA and $GS shorts.  I wanted to be in position for a hard move down, and it looks like that’s what we are getting.

My plan for tomorrow is to short if we get some early strength.  This gives more room to fall if we test the 200 dma or May unfilled gap (see chart) If not, I’ll be content to ride the existing short positions.

Remember that big moves like today often have multi-day weak bounces before falling again.  A weak move in the coming days does not negate the “August retest” bias.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

Stock Chart of the Day: GMCR

GMCR is the breakout stock of the day, breaking out to new highs off a strong gap and price bar to new highs.  How does a swing trader trade this post breakout?  We wait and what.

A post breakout trading range at the new highs should setup up another run up.  The easy trade is a breakout failure.  If price closes below the old high, it will be a clear signal for a swing trade short setup.  The first target would be around $132.50, which would be the "gap fill"  target or the price level before the gap breakout.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com.  

If you like this article, follow me on twitter

How to Swing Trade Late Day Strength Off An Intraday Reversal

As a swing trader it is important to understand that strength often begets more strength.  This is the central principle of the hammer setup.  We look for strength at the end that reverses what looked to be a down move earlier in the day.

$SPY is a good example of this setup.  Trade Report members were alerted to this setup as I made the trade before the market close.  Like clockwork the market gapped up today and the position was sold for a quick profit.

It is tough for some to enter a position when a significant move has already been made.  However, this is a high probability setup and one must forget about what has already happened and look to the high probability of what will happen.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up for a 7 day free trial at BullsonWallStreet.com. If you like this article, follow me on twitter

Stock chart of the day: GPRO

Swing traders should always track open gaps when looking for good entry levels for a momentum stock.  The old adage that all gaps eventually get filled may not be 100 percent accurate, but it does give the swing trader an edge.

GPRO has been on fire of late.  On Monday I noted to Trade Report member that the high volume doji candle that printed signaled that the stock was extended and ready for a pullback, and that's exactly what has happened.  So how do we play this?

As noted in the weekend video analysis of GPRO, there is an open gap in the $73-74 range that converges with both the 20 day moving average and the top of the most recent consolidation range.  This is the level I will start looking to enter.  If I get stopped out here, the next level would be at the pivot level before that around $50.  As swing traders we are always looking of the strongest areas of support for entry.