Waiting for another Bear run after Bulls fail

I am waiting for another bear run in the following airline names after the bulls fail to kick off a bull phase.

Trade - Long LQDT

LQDT

Bull phase within Bear market.  Not an ideal setup.  But its ability to climb even under a gloomy general market could be very telling.

Breakout on May 5 catalysed by earnings report could signal start of a refreshed bull phase.

Date: May 10 2016
Signal: Stochastics crossover
Price: 6.19
Amt: 1,600
Risk: 368 (SL today's low @5.96)

This is the first trade of my new system.  I do not want to risk too much as I have to rebuild my confidence after being crushed in a disastrous drawdown.

A chart showing 1 year's history.

Airlines and Oil Price

$XAL and $WTIC

Intuitively, I thought airlines and oil price move inversely.  The weekly graph below shows that this presumption has been wrong since mid-2015, the time when economic growth concerns and bursts of volatility crept in after long periods of complacency in the stock market.  $XAL now a barometer of economy and sentiment.

$XAL down 3 weeks in a row after encountering resistance @95.  On the daily, it lost its 200-sma on May 4.  Stochastics are signaling oversold.  A hammer was also printed last Friday.  A rebound may occur.  I am going to sell it if it displayed weakness against 200-sma.  The components look much uglier.

There are a couple stocks that look much stronger:

Trade - LABU

LABU

LABU made a green candle on successfully retesting 50-sma.  Though volume was not convincing.  Entered premarket getting at 4.7% discount at 30.77 for 500 shares.  Stop loss placed below yesterday's low at 28.75.

Entry: 500 shares @30.77
MS: 28.75
R: $1000

XLK - ready for a rebound?

XLK

Beaten down stochastics.  But finding support at 200-sma upon nice volume.  I believe it's ready to retest 9-ema and 50-sma between 42-43.  If it could retake the MAs with decent volume, the plateau high ~44.6 made during mid-Apr will be the next resistance to be tapped.

Trade - short NCR

NCR

Shorted on the day of big red candle (Apr 27) @29.71.  Exited on May 2 @28.65.  What a pity that I only had a small position.

Entry: -100 shares @29.71
Exit: 28.65
PnL: $106 (3.57%)

There could be a rebound with oversold stochastics.  Will consider another short if it shows weakness upon encountering 9-ema.

Trade - FB

FB

FB made an all time high penetrating the upper resistance line of a 4-mth ascending triangle on Apr 28.

I entered 150 shares near the support level @117.2 on May 2.  Target of the ascending triangle is 145.2.

Entry: 150 shares @117.2
SL: 114
Risk: $480

Trade - WYNN

WYNN

WYNN rising above 50-sma and penetrated 9-ema on enhanced volume.  Stochastics crossover from oversold territory.  RSI rising above 35.  Targeting resistance level @101.

Entry: 150 shares @94.06
MS: 87.7
Risk: $954

Trade - BRZU

BRZU

BRZU tested 9-ema on a massive drop of over 5%.  I entered a small position of 20 shares at 97.3 with my mental loss around the low of previous retest (86).  This is not for the faint-hearted which explains why I entered such a small position.  I have a feeling that history will prove me wrong with such a small position.

Entry: 20 shares @97.3
MS: 86
R: $260

MHO update

MHO

I did not follow my plan to close my short positions, which is not good.  My thought is that the stock is rising on thin volume suggesting that this is only a counter trend.  Therefore I want to give my trade more room.  I moved my stop to 20.55, just above the high 2 sessions ago.

Execution of the trade is not good as I have risked too much by setting a too tight stop.  Next time I should set a recent high as my stop.  I could find a similar situation in FB where following a heavy volume red candle penetrating 9-ema, it could test even a previous high.

Lesson learnt: don't be too aggressive if the short-medium trend lines are still trending up.

Trade - SKX covered

SKX

I covered SKX well before the closing bell as I believe the pull back in the stock has already ended yesterday.  Note the thin volume when it pulled back and 9-ema was not violated.  I do not want to short a stock that is in good uptrend.

Entry: 33.79
Out: 33.53
PnL: $247 (+0.77%)

While I am writing this post, the stock has risen to 33.91.  A further 40 cents gain.  It could be done even better next time if I could note the thin volume in the counter trend.

BRZU - a bullish chart

BRZU

BRZU completed a 6 month H&S bottom on Apr 21.  It pulled back in subsequent sessions to test the ice line on Apr 25.  The retest was successfully confirmed on Apr 26 when it penetrated the rising 9-ema.  The measured target is 153.7.

I will look to enter upon pull back to 9-ema (currently 97.2).

CTRP - better wait for the market to tell its direction

CTRP

7 consecutive red candles since Apr 21.  Down on heavy volume on Apr 29.
A down sloping 9-ema.
Obviously bearish.

On the other hand, stochastics has dropped to oversold territory.  Price is now in the 43.5 - 45 congestion zone.  There could be some support.

I have no interest to trade the stock before the market clearly tells me where it is heading.

Trade - Short MHO

MHO

After breaking out the 17.5 - 19.2 trading level on Apr 13.  The stock has been trading in a tight range plateau between 19.7 - 20.3 for around 2 weeks.  A bearish stochastics crossover occurred on Apr 21.  It lost the 9-ema support on heavy volume after filling the gap made on Jan 7.

I shorted 1000 shares at 19.41 on Apr 28, with mental stop loss placed just above the close of Apr 27 (20.1).  This is the low of the day, not a good point obviously.  I'm targeting at 18.6, the 50-sma.

The market tested my position on Apr 29 with a green candle closing above 9-ema again right at 20.1.  The move did not invalidate my opinion about an imminent downtrend as it is on light volume and stochastics still not signaling a reversal.  But if it closes above my stop for another day, I have to honour my stop.

Entry: -1000 shares @19.41
SL: 20.1
Risk: $690

Trade - Short SKX

SKX

The 34 level is obviously a resistance level below which the stock has been trading for the past 6 months.  I shorted 950 shares on Apr 27 at 33.79 (the 1st red candle after the breakout on Apr 22.  I placed my stop at 34.3 (near the high of Mar 4).

Entry: -950 shares @33.79
SL: 34.3
Risk: $485

Since the stock has a strong momentum as demonstrated in RSI and stochastics, I will not be too aggressive.  1st target is 9-ema at 32.4.  2nd target is 50-sma at 31.2.   See chart below.

My R is 0.5 potential return is 1.4. 

The recent green candles were supported by decent volume.  So it's also quite probable that it could overcome the 34 resistance level.  If that's the case, I'm ready to go long.  The target would then be 43.5.

Speculation for the week of May 2 2016

APEI

Since making a breakout in early March, price experienced resistance from 22-24 resistance and 200-sma.  Bullishness, accompanied by volume slowly crept in since mid-April.  Price has taken out 200-sma on Apr 19 and is now penetrating into the resistance zone.  Stochastics entered into bullish zone.  The 1st target is 26-27.  2nd target is 31-32.

A notable chart pattern is that it has completed an H&S bottom on Apr 21.  Ice line was successfully retested on Apr 22 & 25.  Measured target is 31.4.

I am bullish.  If it pulled back to 9-ema (around 22.3) under light volume, I will consider an  entry.

BABA

BABA made a failed attempt of the 83-86 zone on Apr 21 after a prolonged period of bullish momentum in the stochastics and developed divergence in RSI.

A pullback below the 9-ema then ensued.  Note that stochastics has entered the sub-10 zone which is worth a contrarian bet.  If it further pulled back closer to 200-sma (74.1), an entry with stop loss placed around 72 could be a good bet.  With the target in the 83-86 zone, the reward to risk ratio is 5:1.

If it decisively penetrated 200-sma, that's another story. I will consider shorting it with a target of 60.