The market moved higher again today. This is the fifth day up in a row, and the fourth day of the swing trade from Monday’s open.
A splendid week for the bulls.
Of the three main trade signals — Price, Breadth and Volatility — two remain on buys while short-term breadth turned down today. That’s a signal for swing traders to take some profits – a third off, or more. Breadth, especially after a strong run of five days and especially with significant profits on the table, is often (not always) the sign that an advance has lost its momentum.
In addition, my nifty-50 stock list moved from 43 stocks on buys yesterday to 33 on buys today as 11 of the 34 oversold stocks yesterday clicked down to 23 today.
In other words it will be no surprise if the market dips tomorrow.
This is will not be a time, however, to short but instead an opportunity to buy a dip for more to come going forward (until further notice).
PRICE: Positive. Long on Monday open (Trade Day 4).
SHORT-TERM BREADTH: Negative. A sell for Friday’s open (Trade Day 1).
VOLATILITY: Positive. Long on Monday Open (Trade Day 4).
LONG-TERM BREADTH: Positive (Day 2).
FEAR AND GREED INDEX: (54, rising in neutral).
NIFTY-50 STOCK LIST: 33 Buys, rising; 23 Overbought, 0 Oversold, no buys today, 11 sells.
The rally results so far (four full days):
TQQQ up 6.7 percent.
XIV up 6.5 percent.
UPRO up 3.0 percent.
TNA up 2.7 percent.
The net gain for a basket of the above leveraged ETFs for the trade is 4.7 percent.
In the midst of a four day trade it is probably worth taking a look at 10 familiar stocks on this swing:
(click on chart for a larger view)