With an uncertain market, it is tough to build long positions with confidence. The psychology of the market is very irrational and swinging up and down with ease. Even on down days though, pockets of strength typically exist. The challenge is finding something to believe in, even if it’s just for the intraday.
One strategy is to search for high volume stocks that are in the green on the day. After you have a list, quickly analyze the charts to find something of interest. The key is to not force any action in a weak chart, make sure you actually like the chart. Don’t just think that because it’s a better chart than the rest, you should play it. Some days you will not be able to find a good chart, especially on a bearish day like today. These below are not bad right now.
Tower Stream Corp (TWER)
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A/D Line: recent strong move north
ADX: strengthening buying trend
CMF (15): positive all day, greater than .5 is very bullish
MACD: positive but leveling off, could be first signal of bearish trend
OBV: confirmed the PPS move north, good sign
RSI: In neutral territory, neither overbought or oversold
Analysis: As long as the ADX continues its strong uptrend with the A/D line north and the OBV confirming each move, TWER could slowly work higher. Make sure it stays within the Bollinger bands before you try to buy as every time it moves above the top band, expect a pullback soon. If the RSI moves over 75, it could become too risky to buy as that’s in overbought territory. Support around $1.80 and if it breaks south of that, be wary and double check the indicators.
Sypris Solutions (SYPR)
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A/D Line: flat but positive, watch for next up or downtrend
ADX: strengthening buying trend
CMF (15): positive majority of the day, good sign
MACD: strong uptrend for now
OBV: flat, this could be the first sign of a bearish trend coming
RSI: In neutral territory, neither overbought or oversold
Analysis: Look for the RSI to pullback under 50 while the A/D line and OBV continue to trend flat or north. CMF (15) should stay positive and the ADX line should continue its uptrend with the green above the red. If they cross, that is a sell signal. Sideways action at $4.30 could create support for a move up if the previously stated indicators stay strong.
As always, do your own homework to see if you agree. Be careful out there today as we could see a significant selloff with Spain being downgraded. Good luck out there.
Mike
No positions in mentioned stocks
