The Weekend Routine 8-07-2022
Short term extended
The Market:
The market picked up right where it left off adding to last weeks gains. The Nasdaq gained % this week and finished near the top of its range. The Nasdaq got extended from its short-term moving averages after rallying more this week and was due for some consolidation. Friday’s hot jobs numbers was the perfect excuse for a pullback. A gap down on Friday morning was quickly bought up by dip buyers, showing the market is still looking to take on risk. This was also shown in the net knew high numbers as the Nasdaq has now had net highs for 15 consecutive days. While overall sentiment is still bearish, the market is sending a different message. This week the Nasdaq had its 7th follow through day since the June 16 low, we continue to see lower volume down days and higher volume up days, and net highs remain. With the strength of the market a “power trend” could start as soon as Tuesday next week.
Secondary Indicators:
Put Call Ratio: Neutral reading at .86
Percent of Stocks above the 50 day: Nasdaq - 75% S&P - 72%
Percent of Stock above the 200 day: Nasdaq - 35% S&P - 35%
Looking Ahead To Next Week:
Next week we will have some major economic data coming out, with all eyes on Wednesdays CPI numbers. More consolidation to allow moving averages on the indexes to catch up would be welcome.
Current Portfolio:
CELH – Gapped up on Pepsi news and notched a new all time closing high. Pulled back hard on Friday on new of moving from the SP600 to SP400. Big volume week, earnings next week.
ENPH – Followed through on last weeks monster earnings report. New highs on big volume again. Current market leader.
LI – Closed the week below its 10 week line, however didn’t take out the low from last week. Volume light as it continues to consolidate.
OLPX – What started out as tight low volume trading took a turn on Wednesday when hit with a downgrade, the downgrade was quickly bought up, but a short report the following day sent this down to the 50 day. Nice bounce from the 50 day on Friday, earnings early next week.
Actions taken:
Bought: Added to CELH on touch of 8ema
Sold: HALO failed to close above 50 day moving average, earnings early next week.
Potential Leaders:
BMBL, BOX, CELH, CF, DLO, ENPH, GTLB, HALO, LI, LNTH, LPLA, OLPX, OPCH, PFGC, PRVA
Many potential leaders such as BMBL, DLO, and GTLB have run up off the bottom very strongly and now need time to form proper bases. If the markets consolidate or get a third leg down some of these names could set up very nicely, while current leaders CELH and ENPH ideally go sideways.
https://www.tradingview.com/watchlists/84325802/
Actionable Ideas:
CF – 3 Touch Trendline - $102.21
CF has been climbing up the right side of its base, has great fundamentals and now has a nice 3 touch trendline. A close above the third touch of $102.21 would be actionable.
CMC – Double Bottom Base - $42.89
A nice 16-week first stage double bottom base. Standard pivot of $42.89 needs to be taken out with volume to be actionable.
LPLA – Failed Breakout Pullback - ~ $205.00
LPLA recently broke the previous highs from the left side of its base. A pullback to the 21 ema within 10 days would trigger a failed breakout pullback buy.
PFGC – Cup with Handle - $52.12
A 14-week first stage cup with handle as well as a nice 3 touch trendline could provide an earlier entry. If buying the standard pivot of $52.12 considerable volume will be required to be actionable. No volume requirement for trendline.
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.