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The bulls got quite rowdy as the trading session developed on Thursday, with plenty of stocks rising over 10%. Those big moves left noticeable gaps on a variety of daily charts, begging the question of whether they are common gaps that will get filled, or breakaway gaps out of areas of consolidation (I covered gap analysis in this post on Sunday). Actually, such as with the IYR, there is a case to be made for a short/intermediate-term exhaustion gap after the run up since the beginning of this month.
Along those lines, I noted in my market recap earlier that I would not be surprised to see the indices cool off a bit here, but then again many others share that view. The real issue is the manner in which that happens–Do we roll over and give all the gains back? Or do we come in slightly and/or go sideways, all the while permitting individual stocks to continue to act well?
Any way you slice it, if you are looking to put fresh capital to work on the long side here you are either going to have to either chase up stocks that have already powerfully broken out of bases, or look for those areas of the market poised to follow suit. Of course, there is the risk that they are simply laggards who will not participate in this broad market move. However, looking at a vast array of charts in the shipping industry, they do indeed look ready to join the party. Keep in mind we are still in earnings season, and a couple of the stocks presented below still have to report.
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love your setups….
Thanks for reading.
Chess – day after day, chart after chart, we learn by seeing what you’re seeing. Thanks for your efforts.
Appreciate it, Hammer.