- Happy Hanukkah!
“Don’t take tips of any kind, no matter where they come from. I trade on my own information and follow my own methods. Keep the number of stocks you own to a controllable number.” – Jesse Livermore
The price action for U.S. market has been similar to last week as it remains a stock picking one with the rotation going on. Last week, SPY was chopped around at 141 – 143. By last Friday, the Dow was up 81 points; the S&P was up 4 points to 1,418.07; SPY closed at 142.41 near its higher trading range for the recent weeks, helped by the better job report and financial sector being outperformed.
However, tech giant AAPL was the biggest story of the week when it was sold off so hard by wiping out most of its previous gain since its November outside reversal. I am not surprised by its bearish reversal from 594ish since I pointed out to watch its resistance area on the tech leaders we watch closely.
My last post stated as below:
“I’ll watch those resistance levels for these stocks:
SPY near 143; GOOG resistance area 700-705; AAPL 590-600, AMZN 250-255; PCLN 665-675. Any rejection from this level on heavy volume could spell some trouble.”
Indeed, they all came off those resistance levels!
AAPL dropped 60 plus points from its recent high of 594ish which points loss surpassed my expectation since the broad market was holding up well. AAPL broke down every pivot point I was watching until it hit the low of 519ish before snapping back and then down. Some traders tried to catch the falling knife from 572, but HFT was way too fast than many could handle.
Its action just demonstrates that anything could happen to darling stocks once they are out of favor and after their charts are damaged technically.
Closing at 533.25 near its recent low, AAPL is still at risk of selling off further. I have 485 as the next downside destination if it breaks 505 which is its recent low.
GOOG and PCLN came off from their resistance levels modestly. But GOOG’s Friday close at 685 was an alarming sign, and breaking 680ish could see a similar plunge to what AAPL did, IMO. Could my target 625 be seen once GOOG does that?
SPY could see 143-144 as next upside level according to its chart.
Some leaders which made new highs have been choppy with wild swings, such as DDD, SSYS, requiring to be babysat. After what happened to QCOR, MLNX, AAPL, etc, which stock would be safe?
FCX got plunged on the merge news to its recent low, but 28-29 could be its selling exhaustion bottom as the next support.
NFLX closing at 85.98 had wild quick bounce from 75 to 90 on the Disney news, but 90 is my upside target based on my chart. Chasing at its toppy area could be risky unless it broke out 90 on heavy volume.
FB has been holding well, and it seems to be building a bull flag before next upside move soon.
During the holiday season, the trading volume continues to be anemic for the choppy market. HFT or High Frequency Trading easily plays tricky game on traders. Most stock leaders have been acting weak while the broad market held up, confusing majority of people.
With all has been said, It is good to trade smaller by following the price action instead of one’s opinions. Choose only a few stocks you’re familiar with to trade unless there are good setups on the stocks you find.
Some wise traders choose not to tweet or chat much when concentrating on trading during market hours. Many traders have already learned this important lesson: the Less Noise and Opinions, the More Profit!
So let’s be flexible and objective since Mr. Market is always right. Best luck on trading!
Here is my SSYS chart to share: