CROX 

I am going to feature and focus on one stock here and that is Crocs ( NASDAQ: CROX ). Here’s why; I am seeing a LOT of patterns that look just like that and that’s kind of a good tell for the broader market but just focus on Crocs ( NASDAQ: CROX ).

This, right here, this breakdown of 143.00, 144.00, we’ll call it down here, of the 50-day moving average. That was an important event and here’s why, because the stock has been holding, right? Then it breaks down, okay fine. Volume was a little lighter than average, which is almost kind of a bullish sign. But then when the stock started to try to regain the 50 and kind of continue to move up here it wasn’t able to do that.

The rally also occurred on even weaker volume. So this last rally, over the last couple of days, if you want to call it that, it’s just prices that close higher than the prior days, I wouldn’t really call this a rally, occurred on very light volume as well. But now, today, we are seeing selling pressure, and a lot of it right at the 20-day moving average of volume, which, by the way, was sucked up by this big volume bar here.

Watch what happens if I just reduce it. So now, 15-days, we kind of take out these big volume spikes here. And suddenly now, we are looking at much heavier than average volume. So the point is, on a very short-term basis we’re having move distribution than accumulation by far. Not to mention the fact that this stock has run, it’s up over 160 percent in a year. And so this is truly the time that you are going to see institutions taking profits.

As this stock traded down here below the 50, that’s a bearish signal. This move today, on Friday, confirms what we saw here, which was a test of the 50-day moving average and then a failure. So I am looking at this, and this is actually a pretty good short setup. Now, by the time you’re getting this, you are not going to be shorting it today, and I wouldn’t recommend shorting it today.

Instead, I would recommend watching this. If the stock rallies back up to around 140.00, the closer to the 50-day moving average the better. If it rallies up to 140.00 that’s when you short the stock and then you keep a buy stop just a little bit above the 50-day moving average, that way you are only losing money if you are wrong. And you are only wrong if the stock actually regains the 50-day moving average. Anyway, that is what I would do.

VSTO VSTO 

Vista Outdoor ( NYSE: VSTO ). This is a stock that I haven’t traded in quite a while. I was just running through a scan of my squeezes and I see that this has been grinding around right along the 50-day moving average, which is essentially flat.

This is the kind of thing I like to see because what it does is, it gives us a potential for a big breakout, boom, a big move higher. We don’t have that yet but this is a pretty simple analysis.

What I am looking at is, if the stock pops up above 42.25, which is a recent high, that’s when I am wanting to buy the stock. So I am going to be buying the stock here, 42.25, and then I am looking for at least a $45.00 handle, which really isn’t that high.

This is a sporting goods company. They carry all kinds of stuff, even the stuff that spits out lead, and so there is some demand for the product. I don’t really care about that, what I care about is, if there is demand for the stock. I would say, that if this stock starts running up above the 42.25 level, about there, that’s when I am looking for higher prices.