This Week’s Set-ups

//This Week’s Set-ups

Hawk’s Scan Sentry Report April 15

Welcome back to Hawk’s Scan Sentry Report. As some of you may have noticed, this report took a week off over Easter weekend. This is what I learned over that absence… If the Easter holiday is supposed to be about new life, regeneration, or resurrection the equities market didn’t seem to get the memo. I’m sure that you noticed that the only market participants that found new life over the last several weeks were ‘da bears’. Our current market environment demonstrates a ‘risk-off’ mentality identified by a lot of money shifting from equities into the supposedly safer bond markets. We have seen quite a bit of profit taking of late which may indicate the beginning of a distribution  phase for many of the high-flying stocks which have led this year’s rally.

So how do I trade this type of market?

In a market like this, the types of trading set-ups I’m looking for are very specific. My time frame for being in a trade is much shorter than while the market was strongly rallying.  I don’t expect to hold anything for more than a couple of days at the most until the market shows its hand. The stocks I will be trading are generally filtered by industry to select only from those sectors which are showing stronger relative strength than the S&P index.  I am primarily interested in momentum trades that are likely to attract the attention of industrial strength players. For long entries I’m scanning for strongly trending stocks; those that are breaking out of congestion may still be good for a 5% gain in a couple of days.

For short trades I want to catch sell stops being run or topping divergences which may indicate trend exhaustion.  The shorts on my watchlist are mostly chosen from industry groups that have recently been weaker than the S&P index.

Let’s take a look at  a few stocks from this week’s  list and I’ll provide a  little explanation of the technical analysis indicated on the charts. If you want further explanation of any of the indicators on the charts below you can find a ‘legend’ at this link.

_____Longs_____

PM

(Note the Oversold Trend Exhaustion1 signal occurring within a nice pullback into the Triple Trender. Also note that Radar 2 Price Leader and Radar3 Trend Strength are setting up for a potential Pullback 23 signal. )

MKC

(Here we see another pullback into the Triple Trender accompanied an oversold Trend Exhaustion 1 signal. The Arps Auto-divergence finder has simultaneously identified a “Trend” divergence signal. Also note the continued accumulation indicated by the Radar1 Fear/Greed indicator. )

ARB

(Here we see a nice Bull Flag pattern preparing to break out. Note the accelerating Radar2 Price Leader. )

_____Shorts_____

PIN

(Here a Bear Flag has just broken down accompanied by a recent shift to bearishness identified by the Radar3 Trend Strength Indicator. This signal is accompanied by a bearish  breakdown of the up-trendline.)

ACHN

(The Triple Trender has just aligned into bearishness as a bearish trendline breakdown occurs. Note how strongly Radar2 Price Leader and Radar3 Trend Strength are bearish.)

ATLS

( THIS SET-UP IS MORE RISKY! Note the Trend Exhaustion3 signal along with the bearish Pivot divergence. The divergence is easy to see in the Radar2 oscillator below.)

May the trend be with you,

Hawk

Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor .

2018-01-08T07:54:11+00:00April 15th, 2012|Hawk's Picks|