A week ago the market was hovering near support and I was wary of any bounce. Now the market has continued to fall and stocks have reached oversold levels. Yet I remain cautious of any bounce as it will likely be a short-term relief rally.
The sell-off this month has done a lot of technical damage to the market and it could be weeks before stocks establish new support again. We do not want to rush into new bullish positions and with stocks oversold we don't want to launch new bearish trades either.
There are no new trades tonight but we did see three stocks graduate from our watch list to the active trade list this past week. Plus, I've added two more watch list candidates tonight.
Here is a list of stocks currently on my radar screen as potential candidates to keep an eye on:
PEP, - looking for a close over $70
WMT, - a close over $63 could launch a new up trend.
FDO, - a dip near $60 might be a new entry point.
F, - a bounce off its 2011 lows near $9.00 could be a possible entry.
GM, - a bounce near the 2011 lows near $19.00 might be a new entry point.
HSY, - a correction lower toward $62 might be an entry.
YUM, - a correction lower toward $60 or its simple 200-dma might be a bullish entry point.