I continue to watch for cup-and-handle and continuation patterns. To learn more about these patterns, check out both of the following articles:
- The Cup and Handle Swing Trading Strategy – Explosive, Consistent Price Moves
- How to Scan for Cup and Handle and Continuation Patterns
The watchlists for both Canadian and US markets are below.
Here’s a brief market outlook
- Overall, I continue to take valid long trades as the signals occur. The S&P 500 is moving back toward its pre-covid highs. That is why a lot of stocks are forming cup and handles right now. If an index is doing it, lots of stocks will as well.
- The NYSE Advance-Decline Line (bottom indicator) made a new high on July 15. This positive divergence follows the prior signal from early June. When the AD line makes a new high prior to the S&P 500 making a new high, the S&P 500 almost always follows suit in making new highs. That points to higher prices over the next couple of months. No indicator is right 100% of the time, but it has been very reliable in the past. Small corrections are still likely to occur.
- 73.91% of NYSE stocks (top indicator) are above their own 50-day moving average (as of Friday). This indicates the majority of stocks are in short-term uptrends, which favors being long swing trades. When it drops below 50, unless you stick to the very strong names, you will likely experience more losing trades.
- Gold stocks remain in an uptrend despite some selling on Friday.
- Usually, before a major market top we see some sort of divergence in various indexes. For example, Russell 2000 or NYSE Composite Index may turn lower or stay flat while the S&P 500 continues to rise. We don’t see that yet. So at least for the time being, the uptrend in most stocks looks healthy. On the chart below I added the Russel index and NYSE Composite Index (top two indicators). Both are pointed up…but we will want to see them push above their early-June swing highs to help confirm this current leg up.
US and Canadian Swing Trading Stock Watchlists
These are the raw lists. These have not been filtered for Reward:Risk, proper volume structure, upcoming earnings, and the handles may not be fully formed. These stocks are added to my list, and then I narrow it down to a few that set up correctly and actually break out. All the details to watch for are discussed in the cup and handle article above. Essentially, I am waiting for these to form the correct pattern.
I don’t include stocks that have already broken out unless they are still close to the entry point.
Stocks with a * beside them are getting to close having fully formed handles.
In swing trading, position sizing is key. This article discusses how much stock to buy based on the risk of the trade, your risk tolerance, and the amount of capital you have.
These are by no means exhaustive lists. There are loads of stocks right now with these patterns. If you see others, throw them in the comments.
US Stocks to Watch
From ChartMill Sqeeze Play Ideas
Canadian Stocks to Watch
From ChartMill Sqeeze Play Ideas
Cory Mitchell, CMT
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.