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Deron Wagner is the founder and portfolio manager of Morpheus Trading Group. His daily focus is managing and trading the Morpheus Capital Hedge Fund, which he founded in April of 2004. He also teaches his swing trading strategy with The Wagner Daily newsletter, which provides exact entry, exit,... More
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Morpheus Trading Group
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Morpheus Trading Group - swing trading blog
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Advanced Technical Analysis of ETFs
  • Why Homebuilders SPDR Is Poised For ETF Swing Trade Entry ($XHB) 0 comments
    Jan 2, 2013 8:27 AM | about stocks: QQQ, XHB, EPU

    The weekly chart of SPDR S&P Homebuilders ($XHB) shows three months of tight basing action at the highs, with a false breakout in early November of 2012 that led to another nine weeks of consolidation. This is the bullish type of price action that leads to sustainable breakouts and ideal, low-risk swing trade entries. This is shown on the weekly chart of $XHB below:

    (click to enlarge)

    Dropping down to the shorter-term daily chart interval, we also see a tight base of consolidation trading around the 50-day moving average, with two higher lows in early and late December. This is the shorter-term type of price confirmation that we like to see confirming longer-term bases of the weekly chart. The daily chart of $XHB is shown below:

    (click to enlarge)

    The last day of 2012 proved to be quite powerful, as major averages blasted higher in what was an impressive day of accumulation. The main stock market indexes closed more than 1.5% higher across the board, with volume increasing on both the NYSE and Nasdaq by 30%. The Nasdaq Composite, which had been quite the laggard in December, closed out the year with a strong 2.0% advance, and is now back above the 50 and 200-day moving averages.

    The combination of Monday's heavy volume advance and the Nasdaq reclaiming the 50-day MA was enough to cause our stock market timing system to shift to a different mode. Regular subscribers of The Wagner Daily should note details of the change in the beginning of today's newsletter.

    With the new change to our stock market timing model, we want to continue building our long exposure as new, low-risk swing trade setups develop. The iShares Peru Index ($EPU) triggered a new buy entry in our ETF trading portfolio on Monday. In addition to $XHB, there is another new ETF swing trade buy setup on today's "official" watchlist. Several individual stock trade setups have been added to today's watchlist as well. Subscribers of our ETF and stock trading newsletter should note our preset and exact entry, stop, and target prices for these potential ETF trades, as listed in today's report.


    To learn how to trade stocks and ETFs for consistent trading profits in both bull AND bear markets, as well as receive real-time updates to our market timing system, sign up to receive our best daily ETF and stock picks through our swing trading service at http://www.morpheustrading.com.

    Original source

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