Swing Trading: From End of the Month Buying to Pre-Holiday Selling
Stocks finished lower for a second day in a row as the end of the month effect and overbought conditions give away to profit-taking, renewed short selling and ever-present anxieties over the economy. Light pre-holiday trading volumes also made stocks easy to move ahead of the Labor Day Weekend.
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Down three days in a row ahead of its scheduled earnings announcement on Tuesday are shares of ^PAY^. The stock has been trading below its 200-day moving average since mid-July.
Also down three in a row heading into its earnings announcement on Tuesday, ^ALTR^ sold-off by more than 3% in Friday’s session. ALTR began trading below its 200-day moving average in early August.
Here are 7 Stocks You Need to Know for Tuesday.
Selling accelerated in financials stocks on Friday, setting up severely oversold conditions in stocks like ^JPM^ and ^BAC^ when trading begins on Tuesday. Shares of BAC fell by more than 8%.
Industrial stocks like ^DOW^ and ^CAT^ were also experiencing heavy selling at week’s end. Both stocks pulled back by more than 3% on Friday.
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What’s up on a down day? Shares of ^NEM^ gained more than 3% in Friday’s trading to close at their highest levels of the year. Friday’s puts the stock in overbought territory above the 200-day moving average.
News that Starz Entertainment was breaking off content renewal negotiations with ^NFLX^ sent the stock tumbling in afterhours trading on Thursday. Down more than 8% in Friday’s session, the stock is back below its 200-day moving average.
Gaining more than 8% and increasingly overbought below the 200-day are shares of ^FNSR^. The stock has been trading below its 200-day since mid-May, and has closed higher for five out of the past six sessions.
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David Penn is Editor in Chief of TradingMarkets.com