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In keeping with the theme of fleshing out my prior posts dealing with “easy” setups, let us examine the refiners from a purely technical perspective.

Starting off with the estimable weiner, WNR, we can see a fairly clean chart, in the sense that we have seen some strong buy volume over the past few months as price consolidated and then broke out above the $17.30 area. Recently, WNR pulled back in an orderly, benign manner. Today, the buyers have emerged again and have recaptured all moving averages. If you are trading this based on technicals, there would be nothing wrong with keeping a very tight stop below $17.30 here, as you would essentially be playing for a breakout right here, right now, as opposed to a continued consolidation.

Note also that with HOC and TSO, two other refiners, we have similar “easy” trade setups. Again, to drive the point home, an easy setup does not mean you automatically make money. Rather, it means that you have a chart at your disposal that makes risk management and stop loss placement pretty well-defined, thus making your trade plan simple and clear.

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A reader of mine (zzzdoc) correctly points out that one of my key broad market “tells,” Freeport-McMoRan Copper and Gold, has been quite weak of late. Indeed, the weekly chart above shows us that we saw a nice bull flag breakout a few weeks ago, only to stall and make what appears to be a lower swing high. At issue now is whether this $52 level can hold as support. If not, a test of the 50 period weekly moving average down around $45/$46 cannot be ruled out. If that sounds as though it could go either way, it is because in this type of market it most certainly can. Despite the fact that I agree with steadfast bulls that we remain in a cyclical bull run and have not yet formed a multi-year top, Mr. Market often forces you to endure wishy-washy price action for extended periods of time.

To be more precise, my analysis of the Freeport chart above tells me that we can continue to expect a stock picker’s market going forward. If you are looking to dump all of your money into the market and pound your chest about how correct you were to be a bull, full-invested across all sectors, you are a few quarters too late to the party.

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Ahead of President Obama’s budget address at around 1:35 p.m. EST., traders are reluctant to press bets in either direction. While some charts in the energy complex saw technical breakdowns yesterday, many of them are already short-term oversold, thus making it difficult to press shorts. At the same time, the bounce we saw this morning never really picked up momentum. Other areas of the market, however, were already correcting before yesterday’s broad market sell-off. The solars may finally be waking up again, after taking over a week to consolidate their recent move–I have my eye on FSLR STP and TSL in that space, mainly.

I am also pleased with how my MA portfolio holding is acting. I have written several posts on MasterCard over the past few months, and it looks like it is turning into a long-term swing trade for me. In particular, if it can clear the $270 level, I expect to see $300 relatively soon.

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We have a little bit of a bounce going this morning, but it is far from a high energy bull party. So long as yesterday’s lows hold, many bulls will be celebrating. However, the reality is that we could just as easily be working off oversold conditions before we head even lower. In situations like these, I like to trade stocks where I have easily defined parameters regarding stop losses and whether the trade is worth sticking with.

I have included two examples below. Note how each chart has seen price already pull in to support, consolidate, and then turn back higher. If, indeed, the market has bottomed, then these types of plays should lead. If, however, the market has another leg lower in store, then we have well-defined lines in the sand to quickly get out.

See Also: The “Easy” Trade Setup

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