Signals of the Day – March 13, 2017

Today was a slow day throughout the markets as many traders stayed on the sideline waiting for the Fed meeting to begin tomorrow afternoon. The S&P and the Nasdaq closed with small gains while the Dow closed slightly down. The indexes are still in a very bullish mode so we are going to continue to use our strategies to prospect for new buying opportunities. Let’s take a look.

ARM5 RTM-17

A potential bullish, snapback reversal setup has appeared on PDM

After several months of a solid bullish trend, PDM has pulled back all month long to this point. It moved through support at the 50 SMA earlier this month with ease, but it is now fast approaching another support level at $21, which is also the 200 period SMA. This level has acted as both support and resistance in the recent past. This gives us reason to believe we should see some price action at this level.

Its steep decline has set itself up for a quick snapback trade. Snapbacks are explosive moves that happen after sharp pullbacks within strong trending markets. To trade a snapback,  you want to find conditions where the market is loaded in your favor.  The second component to a good snap trade is the underlying long-term strength of the stock. Looking back to late last year, we see that PDM has been very strong. So we are currently looking at a situation here, that could yield a great snapback reversal. If this reversal takes hold, we will likely see it run into the $22 zone in a hurry.

The strategy that fired this signal is our brand new ARM5 RTM-17 advanced strategy. ARM5 RTM-17 examines changes in the current markets and compares short term price movement to the longer trend, looking for opportunities to exploit like the one we see with PDM. To learn a bit more about the strategy, check out the PDF.

Darvas Classic

A new higher low is now present on EXC.

EXC has been pulling back over the last few weeks after enjoying several months of bullish moves. It briefly broke through resistance late last month before beginning its current pullback. It recently tested support at $35.75 close to the 50 SMA. Since it held above the 50 and made a bullish pivot, it has formed a new potential higher low, bullish entry. It is testing the March monthly VWAP level and if it moves through level, we could see EXC return to the $37 area.

The signal on EXC was generated by the Darvas Classic Strategy that can be found in our Darvas Box Plug-in. The plug-in is based on the very popular trading method known as the Darvas Box Theory. This plug-in is one of our most trusted and beloved strategies.

ACT EOD

A new buying cycle may be in the works on HAL.

After making new highs back in January, HAL has been in a steady bearish move. It has made consistent lower highs and lower lows. HAL is especially interesting because it is one of the few major companies that has not partaken in the post-election rally for most of the new year. But, it may be ready to rejoin the party and undergo a bullish reversal according to the ACT 2.0.

The Advanced Cycle Trader 2.0 (ACT 2.0) is designed to find the beginnings of buying and selling cycles or modes before they begin. Once we know the mode of the market, we can begin to look for good cycle trades. ACT 2.0 uses indicators that show you the short and long term cycles. The Spectrum Indicator identifies the strength and stability of the strongest market cycle, and its Heatmaps give you a total view of the current market cycles. The MMI indicator is showing us the while the mode still reads below zero, it is on the rise, indicating that the newest cycle is in the making.

That’s it for tonight. We will catch you guys back here tomorrow for more!

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.