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Signals of the Day
SignalWatch - 4.3.17
Good afternoon folks! Well Q2 fell on its face a bit, with all three of the major indexes closing with losses. The Dow fell -.o2%, the Nasdaq -.02% as well and the S&P 500 logged the biggest loss, closing down -.14%. Many are now proclaiming that the Trump Rally is in the books and that most investors will once again focus on concrete facts rather than optimism that Trump will pass large tax cuts and other business-friendly legislation. But as we all know, corrections are the birthers of new opportunities, so a pullback should not be seen as an end-game event. In any case, we have new signals ready to go this evening.
Let’s check ’em out and start by taking a look at MNST.
MVX-15 is calling on MNST to carry out a reversion move.
Monster Energy ended the month trailing down in a tight consolidation after beginning the month with a massive pop due to a solid earnings report. And while it did fall another -.74% today, it is still in a good spot to begin a potential bullish reversion move. It is testing support at $45.85 which also closely aligns with the bottom Bollinger Band, which also makes MNST oversold. If it moves down through support, we may have another shot at an entry at the 50 SMA close to $45, but its current higher low looks like a great spot for a pivot.
The signal on MNST was fired by our MVX-15 strategy, that many of you have become familiar with. Essentially, MVX-15 is looking for the best reversion to mean setups with low amounts of volatility, which we can see MNST fits the bill. Why not volatility? Because MVX-15 was designed to be one of our more cautious strategies, and trading into volatility is anything but cautious. It’s fun when you win, but just about every other time, no thanks. There’s a lot more to this strategy but if you want to know more, check out its PDF.
If MNST pulls off the reversion move, look for a pop back into the $48 zone. Next up, COF.
COF looks like a picture perfect lower high.
We discussed MS last night and today we are going to dip back into the financial sector for another sell signal, this time it’s on Capital One (COF). Like the rest of the financial stocks, it got kicked in the teeth last week. It has since bounced back but today, it fell almost 1%, setting up a new lower high. Which we all know are must haves for successful short positions. If this new, bearish trend continues, we could see a drop back into the $80 zone before long.
COF’s sell signal was fired by SS Heiken Ashi 2, a strategy found in the Secret Sauce 2 plug-in. “Why on Earth is a plug-in called the Secret Sauce?” you may be wondering. It’s called that because we believe the secret to success lies within the sauce that is the Secret Sauce. But seriously, the strategy is looking for changes in momentum and for periods of accumulation and distribution. When you find stocks that are undergoing this process, they are primed and ready to take off. It looks like COF fits that definition. This strategy is one of our founder’s (Ed Downs) most favorite strategies, and it’s worth a closer look here.
The last signal of the day is another financial stock, this time Discover Financial (DFS).
WaveTrader is looking for a new wave of bearishness on DFS.
This setup is very similar to COF. A new lower high has presented itself after a significant pullback. And like COF, it participated in the financial sector beat-down. Keep an eye on this one, if WaveTrader called this right, it could be heading into the $66 zone.
Last night we had WT3 Short Term fire a signal, and that one was on MS. So far so good on that signal, seeing as it fell another -.18% during today’s session. Just a brief refresher: WT3 was designed to find the best higher low and lower high pivots while they are forming so that we can get into the most reliable positions before they have begun. To see last nights signal check it out here or to learn more about WaveTrader check out its very own site here or its PDF here.
That’s all for tonight. You all have a wonderful evening and we will see you back here tomorrow!
“Rule No. 1: Never lose money. Rule No. 2: never forget rule no. 1.” – Warren Buffett
The products and demonstrations listed on this website are not recommendations to buy or sell, but rather guidelines to interpreting their respective analysis methods. This information should only be used by investors who are aware of the risks inherent in trading. Nirvana Systems shall have no liability for any investment decisions based on the use of their software, any trading strategies or any information provided through other services such as seminars, webinars, or content included in the SignalWatch website.
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.