After my post yesterday “11 tips on using alerts to boost your trading” I’ve decided to share some of the alerts that triggered today, charts, potential trade setups, and my thoughts behind each.
The company or sector symbols include: $GLD, $XLF, $AMZN, $FIT, $UNP, $NKE, $VRX, $GS, $WFC, $NUS, ES_F, NQ_F, CL_F
Gold made a 52 week high today but had a sharp pull back during the day. I had three alerts trigger at the open from $125.96 to $125.06. Because new highs usually proceed new highs I was initially bullish on gold when I received these alerts. I don’t trade GLD very often but like it as a proxy for what’s happening in the market. At $125.06 it was a good scalp to the high of $125.67. However, there was a major breakdown in the precious metal and after making a new all time high GLD closed at $122.38. I believe this has been the single biggest 1 day decline for GLD in the last 52 weeks! GLD is well above the channel it broke out of early this year, see blog. Watch for more downside action in GLD. Im particularly interested to see if it re-tests channel high around $115 which could be a good entry.
XLF (Financial Sector ETF)
The financial market has been leading the market down over the past 5 days but staged a nice recovery today. My alert on XLF triggered 1 cent above the bottom at $22.38. I also had two alerts trigger on WFC (Wells Fargo) and GS (Goldman Sachs).
I was monitoring this level on XLF to confirm further downside action in the broader market. When the alert triggered I wasn’t willing to trade $XLF on the long side but in hindsight it would have been a great trade as XLF closed at $22.76. Going forward, I’d like to confirm that this bounce isn’t a one-day wonder before taking a new position. As a side note, I may only trade about 10% or less of the alerts I set. Most of my alerts help me monitor what is happening with a stock and the market and aren’t intended to be entry or exit locations for trading.
AMZN (Amazon) dipped below the 20 day Exponential moving average when it fell below $712. This is something we haven’t seen Amazon do since late April. Amazon is a market leader. It reversed nicely off the low today and closed at $717.75. Look for AMZN to go above $730 for a bullish breakout. It may just chop between $730 and $700 for a while but if it begins to breaking down look for further market downside, especially in the Nasdaq.
FIT (Fitbit) the maker of the popular activity tracker wrist band fell 4% today. The company has had a nice run since coming off it’s Feb low of $11.91 but is inching closer to retesting this low. Should this low get retested buyers may step in and hold a bid. Only time will tell.
UNP (United Pacific Rail) was a stock I was looking to short. My alert was set at $87.48 but the stock gaped down at the open and I wasn’t sure if I had missed my opportunity or not. The stock closely follows IYT (ishares transportation index) so I like to follow both these together and look for any divergences. I sat on my hands and decided to let this one pass but it would have been a solid short trade for about 30 minutes.
NKE (Nike) retested a low it made on June 1st. It bounced off this level but should it break lower more downside price action is probably on the horizon, at least for the short-term. The outlook on retail has been extremely negative over the past few week as many retail stocks have taken a dump. I don’t think retail is hated enough to justify a contrarian approach in the sector so I’ll continue to watch retail and see if NKE can find a bottom and gain footing in the sector before buying any retail related stocks.The other concern with Nike is any negative news around the Olympics. Usually this is a time of year when apparel companies announce advertisements and sponsors so if news comes out that Nike lost these bids to competition it could hurt the stock more.
VRX (Valeat Pharmaceuticals) has been a company I’ve been following and trading for quite some time. See blogs here, here and here. I stopped trading VRX on April 29th which turns out was the right decision. I am patiently waiting for a better price before I re-enter any long positions here. Today’s alert confirmed more downside action when the price broke below $23.08, which was recent support.
NUS (NU Skin Enterprises) was one of the better performers in the market today. The stock closed up %10 percent after announcing a strategic partnership with Chinese investors and positive update on earnings guidance. My alert didn’t incite me to take any action but it’s now on my watch list and I’ll be looking for potential entries.
My early morning alerts indicated that prices in the S&P, Nasdaq, and Crude oil futures were slipping to new short-term lows. I thought we’d have another down day because some key levels were broken however prices manged a reversal into the trading session and repaired the potential breakdown with the S&P and Nasdaq closing int he green. With options expiration tomorrow it will be interesting to see how the market closes the week.
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