Midweek Update
Power Trend
The Market:
The market started the week off cooling down and retesting the 8 ema waiting for the important CPI data. A softer CPI number sent the market gapping up triggering a Power Trend. A Power Trend is triggered when the following criteria are met.
The low is above the 21 ema for at least 10 days
The 21 ema is above the 50 sma for at least 5 days
The 50 sma is in an uptrend
The index closes up on the day
While the power trend has triggered the market does find itself extended from short term moving averages once again and more sideways action would be ideal to allow the moving averages to catch up.
While most are calling this just another bear market rally, the fact that we have a Power Trend keeps me cautiously optimistic that we can rally up at least into the declining 200 day moving average.
Current Portfolio:
CELH – Strong reaction to earnings after posting a great quarter. Potential TML.
ENPH – Continues to act great near all time highs. Looking for consolidation to add.
Actions taken:
Sold OLPX prior to earnings, Sold LI stop hit.
Potential Leaders:
BMBL, BOX, CELH, DLO, DOCN, ENPH, GTLB, LNTH, LPLA, NFE, OPCH, PFGC, PRVA, SWAV
Most leaders continue to consolidate near the highs and show relative strength. It is important to wait for precise entries and not get sloppy chasing out of FOMO as the market is extended a quick snapbacks can happen.
Actionable Ideas:
DLO – Mini Coil - $32.10
Forming a nice cup base with high handle, now has a mini coil as the stock gets above its 200 day moving average.
NFE – Failed Breakout Pullback - ~ $50.00
NFE recently broke out of a stage 1 cup base. A pullback to the 21 ema now would complete a failed breakout pullback and be a low risk entry spot.
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The content presented is for informational and educational purposes only. Nothing contained in this newsletter should be construed as financial advice or a recommendation to buy or sell any security. Please do your own due diligence or contact a licensed financial advisor as participating in the financial markets involves risk.