After coming under intense pressure at the start of Tuesday's regular session, Freeport McMoRan (FCX) found bid support toward the $10.50 area discussed in that morning's Trader's Notebook. The rejection near $10.50 solidifies that area as an important reference point, and traders of that stock should keep an eye on it.
Twitter (TWTR) delivered disappointing earnings after Tuesday's regular-session close, and the stock descended toward $15.50 as a result. Rather than concern ourselves with new swing lows or double bottoms on the daily chart, let's stick with the short-term movement and focus on how the stock trades during Wednesday's day session. Regardless of where the stock opens, I'll base my trading around the single-session volume weighted average price and the regular session's opening print.
Alcoa (AA) continues to work its way higher, and like FCX, should remain on the watch list of all active traders. Our next area of resistance is between $11 and $11.20.
For those of you planning on trading Apple (AAPL) on Wednesday, consider drawing a thick line between $97 and $98. All trading beneath that area opens the door to a retest of the level around $92.50 to $93.50. While I'll likely be among those trading the stock during the trading day, a passing glance at the weekly chart tells you everything you need to know above the stock's longer-term bearish trend.
I've begun to notice a number of energy stocks that could be good trade, because they are in the vicinity of multi-month resistance zones. These zone can be quite wide, as we can see on the weekly chart of Hess (HES) below.
Weekly chart of Hess shares
The risk you run with anxiously selling into a resistance zone is that the stock may simply blow straight through it. So rather than layering out a handful of short-sell orders in the hope that an aggressive seller is lurking nearby, I prefer to have my list of at-risk stocks and scour them on a regular basis in search of shorter timeframe (30-minute, 60-minute or even daily) bearish patterns.
I'll likely put together a larger list of stocks with similar characteristics to HES, and as patterns begin to change, we'll discuss them more actively in Trader's Notebook.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at email@example.com or posted to my twitter feed @ByrneRWS.