Here’s What Traders Are Focused On Today
At mid-day, the broad indices are marginally higher after starting the day in
the red. Oil worries were perceived as an initial pressure on the markets, but
stocks are trying to recover with the S&P
(
SPX |
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PowerRating) up 0.77 and the Nasdaq
(
COMP |
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PowerRating)
up 10.22. Both indices are trading new their highs of the day.
What traders are focused on:
With the earning season largely behind us, traders will be looking for
economic data to provide some directional bias to the market. Before Tuesday’s
open, the Department of Labor is scheduled to release its report on consumer
inflation. The current expectation from economists is that consumer prices rose
0.4 percent in July while core price are expected to match a 0.1 percent
increase that was reported in June.
Then, on Wednesday morning, traders will be looking to the Labor Departments
report on wholesale inflation. At the present time, it is expected that the
report will announce that wholesale prices rose by 0.5 percent in July after
coming in unchanged in June.
Here are three charts from today’s action that have noteworthy technical
setups. Keep in mind that these are not recommendations. They are observations
from today’s action which you may want to incorporate into your own research.
Many traders are focused on Lowes
(
LOW |
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PowerRating) which reported second-quarter
earnings that exceeded analysts’ expectations. But let’s look at what the chart
says. Currently the stock’s price action is contained within a three-week
consolidation. The stock is coming from a strong uptrend that has been in place
for three months. Support is at 64 and resistance is a 67. If the price action
breaks out of this trading range, you might want to look for momentum to
reenter Lowes, possibly to the upside.
Apple Computer
(
AAPL |
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PowerRating) is breaking out above a major resistance level
that has been in place since the beginning of this year. The knee-jerk reaction
of some traders will be to trade the breakout to the upside, but for many swing
traders, this action will be deemed unimpressive because of lack of strong
volume. Also the breakout is occurring during a lackluster market environment.
Therefore, this could be an opportunity to fade Apple by shorting it.
Microsoft
(
MSFT |
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News |
PowerRating) is coming off it’s lows of the day after a two-week
pullback to short-term support at 27. Volume has dried up during the drop. This
could mean that that the short-term downtrend has not triggered significant
selling at that the stock may be setting up to resume its uptrend.
Good luck in your trading,
Eddie Kwong
Editor-in-Chief
TradingMarkets.com