When you see some of the technically-damaged charts like LULU bounce strongly today, it s a good reminder of how deceptive it can be to try to short when the 200 day moving average is still rising on the major indices. It almost does not seem fair to the shorts at times, as the still-solvent ones have patiently waited for textbook bearish setups throughout the uptrend of the first quarter of this year. However, the market can often be a cold-hearted beast, with no regard for who deserves what.
As such, we are seeing some laggards start to play catch up with the recent rally, including CRM DECK NFLX and even GMCR. That does not mean that those stocks are high probability long swing trading setups. In fact, I would argue that they are not. However, agile and precise traders can knock out a few points in them with risk pretty well-defined.
On that note, have a look at some of the casino stocks, which have basically been dead money for quite some time. LVS and WYNN have very similar charts, as stop-losses can be placed below today’s lows as they try to hammer out a bottom. They are not the best of the best setups, but in this tape they have a good chance at attracting a rotation. Also have a look at slot machine maker BYI.
Once again, we are still in a holiday trading week, which means volume stays very light and bears probably wait for a better spot to reload shorts.