My preferred breadth indicator (the McClellan Oscillator), is showing a reading of approximately -12, which is essentially neutral with a bearish bias. We nearly touched oversold territory (-80 or below) after Monday's bloodbath over the Grexit crisis as well as the fear of a Puerto Rican default. In the current bull market when the McClellan Oscillator has touched the oversold territory, it has given traders some great BTFD moments. It is not a foolproof indicator, but really should have you scouring over your shopping list. We may see an oversold reading this upcoming week, but are all held hostage to the Greek Referendum Vote on Sunday.
Seemingly overshadowed by the Greek drama, China has officially entered a bear market after its unsustainable upward trajectory (Chinese Major Indexes were up some 125% over the past year). The Shanghai Composite closed down 5.8% on Friday while US Markets are closed in observance of Independence Day. For the time being, the US markets are ignoring the volatility across the Pacific, but it is something that we all need to certainly keep an eye on. In less than three weeks, the Shanghai Composite has fallen over 28% (33% for the Shenzen which is similar to the NASDAQ).
The Greek referendum vote will likely determine whether S&P futures are either sharply up or down on Monday morning in the pre-market. I'm expecting a big move at the open either way, so I will be watching a few long & short ideas dependent upon where #ES_F is trading. I have a slight bearish bias in the current market environment, so I'll go over a few short ideas first.
NN Inc. recently broke down, tested & held it's 200 day simple moving average. $NNBR has since bounced back, tested & failed to recapture it's 50 day simple moving average. NN Inc. is now sitting below all of it's short term moving averages (21 ema, 8 ema, 50 sma). Short term RSI (5) is pointing down & below the median level of 50. MACD is also pointed down & close to a bearish cross. I'll be watching $NNBR for a break of Thursday's low of $25.66. Stop would be placed above yesterday's high of $27.21; so your downside risk would be defined at 6%. Target would be a retest of the recent lows at $22.25 or a little over 13% from entry.
Deutsche Bank has been in a trading range for the past few months between ~$32.50 & ~$30.00. Currently $DB has bounced off of the lower end of the range and sits at $31.52 as of the close on Thursday. Deutsche Bank is a major German financial institution. This is purely a play off of the Greek referendum vote. I think you can go either way with this one dependent upon how S&P futures look Monday morning. If futures are down on a Greek referendum vote of "No"; I'd take this short with an entry starting anywhere below the close ($31.52), but not past $31.00. I would hold it until it hits the $30.00 area and see how it reacts, but this is my first target. If the Greek referendum vote is a "Yes"; I'd buy it anywhere between $31.52 & $32 with my first target being the $32.50ish area. Again, see how it reacts to this trading range & reassess when it nears either end of the range.
Western Refining, Inc. has been acting well recently along with the majority of the Oil refiners. I am looking to enter $WNR on a break of $45.75 with my stop placed slightly below the 200 day simple moving average at $41.60. My first target is $47.00 with a potential breakout to new all time highs above $51. MACD & RSI are both pointing upwards on $WNR & this one really looks ready.
BioCryst Pharmaceuticals, Inc. looks to be forming a Bull Flag after a recent breakout around the $12.50 area. This isn't a play for the faint of heart since it has a beta of 2.55, which is a reading that it is much higher/more volatile than average (1.0). With that said, I will look to enter $BCRX around $15.50, with my first target of $16.00. When I enter more volatile securities, I tend to keep a closer eye on them & take intra-day scalps as opposed to holding overnight just due to the risk involved. My stop would be placed around $14.82, but if you wanted to give it more rope you could use $14.00 as your stop (bottom of the bull flag).
Biogen Inc. had a recent pullback from all time highs at $480ish recently. This looks to be a short term pullback in a longer term uptrend for $BIIB. If you aren't aware of Biogen, Inc., it is one of the four major Biotech's. Relatively speaking, it is safer or less volatile than your average biotech, but all of these can move violently in either direction based off of various FDA approvals/denials within different phases of drug trials. I've already entered Biogen at $404.50, but it would be much wiser/safer to wait for it to break & close above the downtrend line around $415. My stop is currently placed at $395.20 (right below the most recent low & the 50 day simple moving average. If interested in any of my other current positions, please visit the "Positions" page on the right hand side bar. Thanks for your visit & good luck trading!
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