Market momentum from yesterday has been maintained, as the S&P 500 has rallied back near the top of its recent range near 1650. Since the swoon we saw late last week, equities are up over 2% in a few days, but have yet to take out this round-number resistance level to the upside. Whether or not this move off the lows will continue higher will likely be decided by tomorrow’s FOMC press release and the signaling of tapering(or lack thereof) in the near future.
Currently, stocks are trading near their highs of the day, with the Russell 2000 leading, up 1.1% on the session. The S&P 500, Nasdaq, and Dow are all about 0.7% higher from yesterday’s closing levels. Bonds are bid slightly higher despite today’s equity strength, up 0.3%, while metals and miners are taking a hit. Currently, gold is off 1.2% today while miners are 2.6% lower on the session.
CHART OF THE DAY
Westport Innovations (WPRT) – The low-emission engine technologies firm has been stuck in a range as of late, but appears ready to break to the upside. Since rallying near 32 in February, the shares have traded in the narrow 28-32 range, and currently sit perched above the 30 level, offering a nice risk/reward entry from the long side. Short interest on WPRT is very elevated at 24% of the stock’s float, and any positive news could spark a strong move higher.
I like a long entry here with a stop on a close below 28.50. I would initially target a move back to 32, with 35 as a stretch target.
WHAT I’M EXPECTING
I’m looking for choppy conditions into tomorrow’s FOMC release, then a big move on the news. Nothing earth shattering there, but picking a market direction ahead of this event is a 50/50 proposition. Managing risk into this news release should be your primary goal.