The Market:
After last weeks big gains, the market became short term extended and some sideways to downward action was to be expected and welcomed. The Nasdaq looks to have flipped the June 2nd high from resistance into support, and finished the day with another accumulation day. The market has been sending a clear signal since the 6/16 low with 7 follow through days since then. The rally attempt we are currently seeing is much different and stronger than previous rally attempts this year. If you compare the current rally attempt to the rally in March that saw the Nasdaq reach its 200 day moving average, it looks completely different.
March:
Volatile wide range bars
Straight off the bottom
Distribution days closing near the lows
Now:
Stair stepping higher
Tight controlled ranges
Low volume down days that find support and close tightly
Multiple follow through days (Tomorrows education article will be on market bottoms and follow through days)
While we don’t know if this rally attempt will turn into the next great bull market or fizzle and die the change in character from previous rally attempts this year is clear.
Current Portfolio:
CELH – Gapped up Monday on news of a partnership with Pepsi. Holding near prior all time highs consolidating recent gains. Very strong, potential leader.
ENPH – Potential market leader. Blowout earnings last week and consolidating at all time highs. Unaffected by weak earnings from peers.
HALO – Continues to consolidate as it pulls back to the 10 week moving average on light volume.
LI – Continues to find support at the 50 day moving average.
OLPX – Completed a failed breakout pullback to the 21 ema today on the heels of an analyst downgrade. Found support and closed in the upper range.
Actions taken:
Sold LNTH ahead of earnings tomorrow morning,
Bought: OLPX (failed breakout pullback – learn about this set up below)
Potential Leaders:
ARIS, BOX, CELH, ENPH, FNKO, GTLB, HALO, LI, LNTH, OLPX, OPCH, PFGC, PRVA,
The potential leaders continue to act well and hold recent gains. It is vital to time entries and be aware of earnings dates for these stocks as well as stocks in the same industry group that could cause sympathy moves. (Ex. ENPH and SEDG)
Actionable Ideas:
LNTH – Mini Coil / Buyable Gap Up – ~ $78.17
LNTH has formed a nice mini coil ahead of earnings. If the reaction is positive and it clears the mini coil high it is actionable. With earnings coming it is also possible that LNTH forms a buyable gap up. The trigger for the buyable gap up would be an open of 5% or greater.
LI – 50 day pullback - ~ $33.35
LI continues to consolidate near its 50 day moving average and is finding support there.
PFGC – Trendline / Cup with Handle - $52.12
PFGC has formed a proper cup with handle pattern with the standard pivot of $52.12. A 3 touch trendline is also present and could provide a lower risk entry prior to breaking the handle high.
If you enjoy my work please subscribe and share. For daily thoughts and updates follow me on Twitter @smashapalooza16
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.