Morpheus Trading: Stocks failed to follow through on Wednesday’s bullish reversal, closing near the lows of the session and retracing 75% or more of the prior day’s candle. Clearly, the market has yet to establish any traction, and the pick up in volatility makes it difficult to stick with positions and manage risk.
Although Thursday’s action was ugly, sometimes a disappointing day of trading following a bullish reversal candle can lead to higher prices within the few days (the weak hands chasing the bullish reversal action late Wednesday are washed out).
There are no new Daily swing trade setups for today, as we already have enough long exposure. For those that are new to our report, it should not be your goal to match every single trade we take, as this is an idea generation service. As of right now, 2-4 open long positions with reduced share size is ok. Once the market and our positions begin to cooperate, then we can add more exposure.
Mobileye NV (NYSE:MBLY) still looks pretty good, trading in a fairly tight range while digesting an 80% move off the lows.
It is a recent IPO from the Netherlands with an RS ranking of 99, and strong quarterly numbers for earnings and revenue growth.
At $50 with an average trading volume of over 7 million shares per day, this stock is very liquid and quite explosive.
Look for the price action to continue to consolidate for another week or two above $50, with a few shakeouts along the way.
We’ll continue to monitor the action for a low risk entry point.
This article is brought to you courtesy of Morpheus Trading, LLC.