wedging our way into summer

$SPY the markets continued this week carving out a range in between last weeks candle and ended with an inside week. You can see here on the 30 min chart we are making lower highs and higher lows which makes sense within the larger context of the inside weekly candle. A lot of people have opinions as to whether we are going to shoot back up and return to highs or roll over and begin erasing our january to april rally. I think its too early to predict the next directional move right now and I suspect we are going to spend considerably more time within this 160 to 165 range on the SPY then most think. I think we can have some fakeout breakout moves in both directions but for now I think we need to do some more filling in before a sustainable move. A daily close below 160 or above 165 would begin shifting my opinion bear to bull respectively.

$AAPL so Apple remains in a downtrend making lower highs and lower lows. Clearly a bearish pattern and it did under perform the markets and end the week on the lows. Larger support doesn’t come in until 420ish but until then the bulls need to see some type of base begin taking shape instead of this slow bleed down trend. It’s possible Apple can  begin carving out a range around these levels about 430 but it’s guilty as a bear until proven otherwise. I continue to find intraday trades both long and short and still find it difficult to have a longer term directional bias.

$GOOG similar to the indices Google is in early forms of a wedge and probably a range that is going to take more time to fill out. It’s one of the stronger of the nasdaq leaders and it remains a solid 25 points off the lows from last week. This name should be the first to firm up and get ready to move higher if the markets continue to be constructive. I believe you can watch Google for clues about the broader indices. If this thing holds up well in a high level base it’s going to be much tougher for the bears to have their way with the indices.  watch 865 on the downside and 890 up top.

$NFLX one of my favorite patterns to trade are when stocks breach through a support or resistance level (in this case a prior swing low) and rally quickly back through it. Netflix sets up a nice long shooting against 210 to the downside or 206 if you want to give it a little more wiggle room. 220-225 level is packed with resistance now but do note the pattern of lower highs in place. Overall a  tricky spot given the markets position but It should be setting up a nice directional trade soon.

$FB downside with facebook this week is that it gave back the entire gap from the 10th but on the plus side it did seem to rally off the low 23s creating a nice double bottom on the daily and a possible inverted head and shoulders on this timeframe. You really want to see this stock hold the lows from Friday and begin to make its way back up to the upper 24s. You can get a cheap look at a long at this price using 23 as a stop. Have not been paying too much attention to this name as of recently but i will have it on the radar this week for potential long.

$AMZN another wedge shaping up here near the top end of it’s recent action. The breakout level at 270 was tested this week and it did hold and offered a 7 point bounce. Much like a lot of these other stocks we could see the early makings of a 10 point range between 270 and 280 before we get any real resolve. The longer it can base up here and not lose 270 the better shot the bulls have at taking out all time highs on Amazon.


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Evan Medeiros

Evan is the founder of the Trade Risk. With 25 years of coding experience and a B.S. in computer science, Evan brings a systematic discipline to investing in the stock market.

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