More indecision from investors on direction. Energy jumped 1.8% on the day… of course it fell 1.1% on Monday. The gain pushed it through the next resistance point at $80.50 and looking to match the February highs at $82.50. In a nutshell that was the activity for the day. Two days of indecision with earnings starting to ramp up. The positive news from JP Morgan was offset by Wells Fargo. Bank of America today may shed some light on the financial sector, but don’t expect it to a glowing report. Thus, we proceed with the same caution towards stocks.
Result for the Daily EGG Scan:
YINN – China’s has pushed vertical the last two weeks and now has paused. The consolidation at the high is a positive in that it is not selling. Booked some gains off the table on Thursday, adjust stops higher and watching. Growth is stalling, but thus far traders are being patient.
RUSL – Russia is moving higher, but the volatility is a challenge for many. Upside is catching momentum again with the move higher. Took some profits early Friday, watching how it unfolds on the balance.
EDC – Emerging markets have benefited from the positive global money rotation. Solid rally with small test, but followed with some consolidation of the move higher. Holding above the 200 DMA. Raise stops to $27.25 and let it run.
ERX – Energy is trying to push higher, but the volatility in crude oil is keeping the progress slow and steady. Nice gain on Tuesday to recapture the loss from Monday. Trend off the March low still in play and $66 the target on the trade. $60 entry (on test) to add a position is attractive currently.
GASL/FCG – natural gas is moving higher as the energy stocks rebound overall. Positive moves in the sector.
KRE – regional banks moved back near the previous highs with the start to earnings beginning today. Regional banks are favorable longer term if the Fed will follow through with rate hikes. $41.40 level to watch.
OIH – Oil Services, like the broader energy sector making move. The bottom range is now back at the high and in position to reverse the downtrend. Nice set up and hit entry at $36.50.
EUO – Euro moved lower and the short trade moved through the entry at the $27.05 level on Thursday with the target at $28.50. Still like this trade if it tests lower early.
Watching this week: RUSL ($30.15 entry) , GASL ($3.90 entry), BIB ($173.50 entry), UCO ($8.10 entry), SOXL (stalled), EWZ ($34.05 entry), SPXL ($92.10 entry)
Watching today: SOCL, EUO, DZZ
Possible EGG Position:
Sold lower on the worries in the US over economy takes energy sector lower. Added ERX to the watch list failed to capture the trade Friday as the intraday pattern setup gave a higher entry point of $60.40. Gave bigger test on Monday, and gapped open again on Tuesday. Needless to say volatile as I stated when I posted it. Entry just needs to be taken and let it work itself out. I continue to expect this to be a volatile position obviously and we will give it more than normal room… thus, 1/2 position to manage the downside risk of the trade.
Also looking at OIH in the energy sector as alternative trade. As stated above a break above the $36.50 give good entry point. Adding to the table as well to start the week. This offers a cleaner entry and less volatility currently? Watching today.