Stock market health remains poor, but is improving recently. On June 24 there was a follow-through day. There are also a couple of other market health indicators that are bullish or improving. For this reason, I’m willing to take some long swing trades in quality setups…but there aren’t many.
See the latest Stock Market Health Update here.
I’m not loading up yet. I’m allocating a small amount of capital, and if conditions continue to improve I will allocate more as quality swing trades trigger/arise.
The stock lists below are based on Contraction Patterns. This pattern and others, when to trade (and when not to), and scanning for trades are covered in the Complete Method Stock Swing Trading Course.
US and Canadian Swing Trading Stock List
Because the market has sold off so much, I basically just scanned for stocks above their 50, 120, and 200-day moving averages. The stock has to be at least 30% above its 52-week low and no more than 30% below its 52-week high. Price above $0.5 and average volume above 200K per day.
I don’t find a whole lot…which in and of itself is a warning sign that it is VERY early. If the stock market does in fact turn around and start heading higher, there will be plenty of trades and opportunities.
In regards to the list above, most of these stocks I’m just watching to see how recently strong stocks act over the next week or so.
MCK was a trade I was really interested in about a month ago but never triggered. It drifted lower but has bounced back and has recently consolidated. It’s a trade contender, and at minimum, I’m interested in how it performs over the next couple of weeks.
FNKO is a rounded bottom. I haven’t talked much about that pattern, but it is a quality one. I plan to add a video on Rounded Bottoms to the Complete Method Stock Swing Trading Course shortly. This pattern has already triggered an entry, yet I’m interested to see how it plays out over the next couple of weeks.
ACHC is a downward sloping triangle, and a cup and handle pattern, that broke above a consolidation (within the triangle) on Friday.
CTIC is forming a triangle. Still needs to consolidate.
ALKS is forming a triangle and a cup and handle pattern. It has already consolidated, and I’m just waiting for the breakout above that recent consolidation. The only thing I don’t like is that it’s a bigger triangle. If I decide to trade it (if it breaks higher) I will use a trailing stop loss.
STNG and TRMD are both in strong uptrends, and moved sideways over the last few weeks. This has formed a small range with the price currently near the bottom of that range. I haven’t talked about this pattern much either, but buying near a range low can often be a great entry point in strong uptrending stocks, especially if there is a false break out of the bottom of the range, and the price quickly starts rising again. Something to keep an eye on. Don’t trade a pattern unless you have studied it…but it is a pattern worth studying.
BLU and BLU.TO recently broke out of a triangle pattern. It didn’t consolidate prior to the breakout so I wasn’t in the trade. It is another one I’m keeping an eye on. It’s back near the top of the triangle. I’m interested to see how it performs over the next week or two.
How breakouts perform let’s me know how easy it is to make money, and how much capital I should be deploying. If breakouts are working, I want to be involved and putting capital to work. If most breakouts are failing quickly, or not producing gains, then I know to stay mostly in cash and/or await better conditions.
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By 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.