The Motion in the Market's Ocean

The major averages are still largely rangebound, especially the S&P 500 and Dow Jones Industrial Average, while the small caps in the Russell and tech plays in the Nasdaq Composite remain a few percent off recent highs. 

However, with bulls defending the big, round 2,700 level on the S&P yesterday, as well as the 50-day simple moving average, there is an air of relief around us as they perhaps blunted what could have been an unpleasant surprise before the Fourth of July next week. 

In addition, Wells Fargo is gapping up more than 5% and trying to stop the general bleeding we have seen among the larger cap banks, though some of the bounces in peers like BAC are less inspiring.

Nike is surging nearly 12% on earnings, though other retail plays like UAA are fading as I write this. 

In sum, this type of market action has me testing out the waters again on the long side. I am still not looking to be overly aggressive into the holiday week next week. But it sure is enticing to see some tech monsters which have finally dipped and may be presenting lower risk long entries. 

One such example would be the enterprise software with dazzling growth, Atlassian Corporation. (TEAM). In lieu of being too aggressive a few weeks back and pressing for another imminent move higher, we now have a quality, up-and-coming name which has pulled back to its 50-day moving average (dark blue line on daily chart, below). 

Naturally, this thesis only holds true if bulls keep the broad market rangebound, at a minimum, and can continue to avoid a fresh wave of selling. But at least with a name like TEAM (and QQQ in general) we have a well-defined stop-loss area at the 50-day to sensibly mitigate risk.