Swing Trading: Overbought Conditions Continue to Fade as Stocks Trade Sideways
Stocks have begun to move sideways as the market attempts to digest recent sudden gains from the rally off the lows from early last week.
Strength was difficult to come by in Wednesday’s trading. But sellers appear to have become more aggressive in the market for retail shares. Many retail stocks – especially high end retail stocks – have remained above their 200-day moving averages during the recent correction in the broader market. And traders in those stocks increasingly have been taking their money off the table.
Scheduled to report quarterly earnings on Thursday are ^HPQ^, as well as retailers like ^GPS^ and ^ROST^ and ^GME^.
HPQ pulled back by more than 3% in Wednesday’s session as traders took profits after a four-day rally in the stock. ROST and GME were also lower in Wednesday’s trading while GPS finished little changed.
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Here are 7 Stocks You Need to Know for Thursday
Among the better performing stocks in the S&P 500 ahead of trading on Thursday was ^S^. Shares of S earned more than 4% on Wednesday, closing in overbought territory below the 200-day moving average for a second day in a row.
Also up among major telecoms were ^T^ and ^VZ^. The stocks added more than 1% and 2%, respectively in Wednesday’s session, and are both trading below their 200-day moving averges.
Down well over 2% ahead of its scheduled earnings announcement on Thursday were shares of ^SHLD^. Selling off by more than 5% and also scheduled to report profits and revenues on Thursday is ^CRM^.
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The most aggressive selling in the S&P 500 was in the market for shares of ^DELL^. DELL pulled back by more than 10% after announcing better than expected quarterly earnings after the bell, but disappointing analysts on revenues.
Closing lower for a second day to finish just outside of oversold territory above the 200-day moving average ahead of Thursday’s session were shares of ^NFLX^. NFLX closed lower by more than 3% on Wednesday.
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David Penn is Editor in Chief of TradingMarkets.com