Here are the stock swing trading watchlists for Contraction Continuation Patterns for the US and Canadian markets, along with a swing trading market update on the health of the stock market.
Since the market is in an uptrend and pushing to new highs, the Contraction pattern is the main pattern in play currently (relative to other patterns I trade).
The stock market is still in good shape according to the market health indicators. Therefore, I am continuing to take valid long trades as I see them.
Charts are provided by TradingView.
From top to bottom, here’s what all those indicators mean:
- Nearly 82% of NYSE stocks are above their 50-day moving average. That means lots of stocks in uptrends—favorable for swing trading on the long side.
- Volume is not particularly important at this stage.
- Next, the red bars show up volume versus total volume. This is helpful after a decline. Not so much here.
- The blue bars show the daily rate of change in %. Price declines contain large single-day drops. Up periods are typically marked by much smaller daily movements, especially to the downside. We haven’t had any large drops of 2% or more (single day) since late October. When that indicator is quiet, it is good.
- The NYSE Advance-Decline Line is at new highs. This shows wide participation in the number of stocks advancing.
- All the major indexes are performing well currently (not selective). This is good.
- From a price action perspective, we are in an uptrend and the price has broken higher out of a large range and is currently breaking out of a consolidation just above the range. Price action is bullish until proven otherwise.
These are not predictions or forecasts. I simply use these indicators to determine what conditions are right now, so I can determine how much of my capital I wish to deploy while swing trading. Right now, I am taking trades as they come.
Swing Trading Stock Watchlist
The stocks below aren’t trade recommendations. These are stocks that are forming potential Continuation Patterns. Until they form a valid pattern, I don’t trade them. And even if they do form a valid pattern I can’t trade them all. The list can be further reduced by considering risk/reward ratios and profit potential based on the target price.
I don’t hold these types of swing trades though earnings.
If a stock only says “Contracting” next to it, it means it still needs to consolidate in the correct location and with the correct volume structure, or that a bit more contraction would be nice. If it says “Contracting. Consolidating”, then the pattern is closer to setting up properly and potentially triggering a trade.
US Swing Trading Stock Watchlist
Here is the scan I ran. 250 results, manually filtered to those below.
An expanding list of swing trade candidates is also typically a favorable sign. Lots of stocks on the list this week.
AMRC – Already broke out, still in the original entry area near $44.
CC – Coming out of a downtrend. Broke out. Consolidating again just above contraction.
DSKE – Contracting (after Oct 21). Consolidating.
FDX – Contracting. Consolidating. A bit of an odd pattern.
FRPT – Contracting. Consolidating.
LSCC – Contracting. Recently broke consolidation. Still in area. Small pattern.
NBEV – Contracting. Consolidating.
NVUS – Coming out of a downtrend. Contracting. Consolidating.
PENN – Contracting. Consolidating.
PWR – Contracting. Consolidating. Small pattern.
REGI (from last week) – Contracting. Consolidating.
SE – Contracting. Consolidating. Small pattern.
SGRY – Contracting. Consolidating.
APPS – Contracting.
BIG – Contracting. Earnings soon.
DAR – Contracting. One more drop (small) and rally and would be nice.
IIPR – Contracting. Pretty small pattern.
REZI – Starting to Contract.
WMS – W pattern. Haven’t discussed this on the site, but nice consolidation at the top of it.
WOR – Contracting. Small pattern.
ZG – Contracting. Small pattern
Canadian Swing Trading Stock Watchlist
Here is the scan I ran. 95 results, manually filtered to those below.
RUP.V – Contracting. Consolidating.
HEO.V – Contracting. Consolidating.
ADK.V – Contracting. Consolidating (small pattern, since the pattern started in early Nov. Including the prior drop means the pattern isn’t valid…it needs another drop).
AAG.V – Contracting.
ISO.V – Contracting
ORTH.CN – Contracting
XBC.V – Contracting. Could form another consolidation.
IPT (from last week) – Contracting.
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.