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Signals of the Day – Happy Friday!
Welcome!
Happy Friday folks. Another week in the books and I truly hope it was a splendid one for all. Let’s go ahead an launch straight into the signals. Post-haste!
MS-16 is looking for a bounce on CNP.
CNP has been extremely bullish over the past few months, moving higher with few opportunities to enter on higher lows. But now we have that chance thanks to a pullback, which is using the 50 SMA as support and has formed a double bottom reversal! Nice. It is oversold to boot, which as we all know, makes it a prime buying candidate. If we do see this move materialize, we could be looking at a pop back up into the $29 zone.
The strategy that fired this signal is our old friend, the MS-16. MS-16 works by using two different momentum based systems and filters based on trend. MS-16 also uses an indicator called Days to Earnings which helps traders avoid trading into earnings reports, offering a extra layer of safety. MS-16 scans for stocks that are outperforming the current market but have also undergone significant pullbacks against its prevailing trend. This leads us to great reversion opportunities like we see here in CNP. This could be a mover and a shaker so keep a close on it CNP and MS-16.
Next up, Dominion Resources.
Another MS-16 signal! This time on D.
Another MS-16 signal? You betcha. Why? Because they’re awesome. D has pulled back significantly but held steady once it tested support and the 50 SMA, which sets up one heck of a reversion to mean move. It’s oversold on multiple indicators and volume is high. If this thing pulls a snapback reversal, it may just wind back up in the $80’s pretty darn quickly.
We already talked about MS-16, so I wont bore you once again. So moving on!
ICM is looking for renewed strength on VMC.
VMC has been moving higher, b
ut in fits and starts and has been gappy as well. One really nice thing about it though, is that almost all of its higher lows in the past several months have lead to solid moves. We are witnessing once such pullback now and the Ichimoku Cloud agrees. It has formed a higher low along the trend and is well above both the 50 and 200 SMA’s. Volume is also holding steady. If we see a surge in volume, we could get a push back into the $132-$133 zone in a hurry.
The Ichimoku method takes recent price data and plots two main indicators (Leading Span A and Leading Span B) to create a “cloud”. The cloud is then shifted to the right. The visual nature of the cloud tells us lots. For instance, if price is on either side of the cloud, we can see what kind of trend we are in. The thickness of the cloud tells us the trend strength. As price approaches the cloud, we often see the cloud provide support or resistance. Already you can see that the Ichimoku Cloud provides you with valuable information and it is easy to use. There are even a few bonus indicators thrown in for good measure. The ICM Cloud Bounce Strategy looks for price to test the outer boundaries of the Ichimoku Cloud. Since the Cloud often offers support or resistance, this setup provides excellent trend trading opportunities.
That’s it for the week! Head on back Sunday to get next Monday’s batch of signals!
On another note… there are still a few of you out there who haven’t jumped on that OmniTrader trial. And we get a lot of email asking if there is any way possible for our strategies to work on non-Nirvana platforms. That answer is, and always will be, no. BUT… that’s the beauty of the trial! One month, one the house. Full access! Paper trade or trade live. You’ll be able to do it all and get the benefit of these strategies! So give it a whirl. You’ll be glad you did.
Have a great weekend!
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About the Author Ryan Belknap
Ryan has been with Nirvana since 2012 and has been manning the trading desk since Day 1. He was one of the founding members of Nirvana's Trading Lab and also TraderSource.com along with Ryan Olson and Russell Casperson. Ryan logged more than 3,500 hours trading and educating live in the Lab. He is also the lead author of SignalWatch.com. Ryan is a seasoned educator and has conducted numerous educational webinars and is an OmniTrader University instructor. Ryan prefers swing trading and position trading. Outside of the market, Ryan has passions for the outdoors, baseball, exercise, coffee, pop-culture and spending time with his family.