Are These 15 Stocks Enough To Push Passed A Bear Market?
With some insight into an open equals low candle setup.
After the general market underwent a strong advance from 9-15th November, a subsequent pullback was overdue. Here is why I think this pullback may have arrived and could be offering some great risk/reward opportunities:
This morning the market gapped down with the $QQQ opening -1.9%. Interestingly enough there was a particular bullish move off the open with the low of day being established right off the open. This situation is known as OEL - open equals low and is a concept I learnt from @TCMLLC - JT from TickerMonkey.
For traders looking to learn more about specific candles and their developments - I suggest Japanese Candlestick Charting Techniques, Second Edition
This shows an instant demand from market participants right off the open, showing that despite the initial gap down - from then on it was clear that demand > supply - and so the market kept moving up, even going red to green but ultimately closing down -0.22%.
I see this as a bit of a character change in the market to what we have been seeing recently. Being in a bear market - it is typical that stocks open strong and close weak. However, seeing that a weak open was bought up and eventually closed strong is actually encouraging.
As things stand - my short-term line in the sand is currently the 283 level on the $QQQ, correlating with recent highs and which we managed to close above today.
More importantly for my style, it wasn’t just the market indices that showed positive action. Many of the stocks I watch opened weak and closed strong - another encouraging factor.
Now that we’ve spoken about the good; it is necessary to emphasise that we are not in the clear just yet. Manage risk well at all times and let your positions dictate your level of exposure via progressive exposure.
Similar to the market indices, which had their lows of the day right at the 10EMA, many potential leadership stocks showed similar action. Some stocks which look very interesting to me for swing trades currently include:
GFI
PCVX
YOU
MGNI
BAND
DOCS
CCRN
HLX
SE
AMC
ENLC
ERX
SGHT
ENPH
MAXN
As for specific potential leadership groups - oil and solar are both looking potentially constructive - as shown by the charts above of ERX, HLX, ENLC, ENPH, MAXN.