Trade-Ideas / Game Plan
Heading into the week I’m sitting on my hand. If ZS or PYPL tightens up, they’re high on my list. I also like DQ and REGI quite a bit. They are both in the energy sector which is super hot right now and the group ranks are 2 and 7 respectively. If I were to get into both DQ and REGI I’d be very heavy in energy especially already holding SEDG. I don’t mind this but having an awareness of it can help me aware of and more sensitive to signals within the group.
Since there’s nothing I’m looking to place orders for right away, there’s no spreadsheet this week. BUT I’ve listed out the ideas on my radar here: http://charts.trendspider.com/shared/5fb83e5517b594001546fece?t=4 AAPL, AMD, AMZN, DKNG, DQ, FUTU, IIPR, LL, NOW, PYPL, REGI, SHAK, SHOP, SQ, STNE, ZS
The ideas I have for day trades (stocks w/ lots of momentum and little to no overhead resistance) are here: http://charts.trendspider.com/shared/5fd54420651895001585259b?t=1 CHWY, ETSY, FATE, FND, FVRR, NET, NVCR, PANW, PGNY, ROKU, SNAP, SNBR, SPOT, TSLA, TTD, TWLO, TWR, TTGT
And here are some of the bearish trade ideas I’m keeping on my radar in case things turn south: http://charts.trendspider.com/shared/5fd54521651895001585259c?t=1 AMAT, BABA, DPZ, DXCM,
MARKET MOOD: A Hard Penny environment!
During today’s DEEP DIVE I was asked if I thought that this is an ‘easy dollar’ kind of market or if I agreed with Mark Minervini that it’s currently a ‘hard penny’ environment. I love Mark. He’s a fantastic guy. A great coach, teacher, and I’m blessed to call him a friend. However, one of the things I’ve come to learn the hard way is that if we’re going to have lasting success at this game, we must learn to draw our own conclusions.
So we assessed the major indexes across time frames like we always do. We found uptrends on the monthly and weekly charts. Price appears extended on Russell and even the NYSE. A trip down the the 10wk line is almost 10% on the Russell and about 5% on the NYSE. See charts linked below.https://www.tradingview.com/x/xPvRxNkt/?aff_id=15325&offer_id=10https://www.tradingview.com/x/8p8I5jOv/?aff_id=15325&offer_id=10 When we got to the daily time frames, we saw a very different story. Plenty of near term support levels across the board! Kind of like a well packaged gift you’re getting ready to ship for the holidays. But is the market sending us the gift we’re hoping for or is it sending us a stale fruit cake? Looking at the 21 stocks setting up this week (both bullish and bearish), there’s hardly anything that caught my interest. The bearish setups look clean to me like this one in BABA https://www.tradingview.com/x/seuiNOBn/?aff_id=15325&offer_id=10 but even then the market is still in an uptrend! Only if we get a sharp break to the downside would I begin entertaining shorts. The bullish ideas that are ‘ready’ and actionable right now have some serious flaws as a momentum trader. Take AMZN for example. The setup itself has great reward:risk at over 4:1. But the RS line is lagging and it’s not a leader. Have a look at it here: https://www.tradingview.com/x/VSc9VZ3O/?aff_id=15325&offer_id=10 It is tightening up along the 100ema though and looks great if you’re an investor. A trader… not so much… Even ZS which looked like a decent short stroke pattern on the weekly timeframe (see chart here: https://www.tradingview.com/x/fgN0RSLp/?aff_id=15325&offer_id=10 ) …is a bit TOO wide when we look at it on the daily time frame (see chart here: https://www.tradingview.com/x/wcpqg5pM/?aff_id=15325&offer_id=10 ) The stop loss is over 9% from the entry price and on this type of setup, that’s a bit too much in my book. So what does all this equate to? A hard penny environment! OVERALL DIRECTION: UUS (Uptrend on monthly and weekly timeframes, and sideways on daily time frames)
NEW HIGHS vs NEW LOWS: When assessing the number of new highs vs new lows, I look for anomalies. On Wednesday when price hit highs and reversed along with much of the market (and many of the positions I was in), I took that as a sign to move to cash. (see chart here: https://www.tradingview.com/x/hrUkgXVU/?aff_id=15325&offer_id=10 ) A day later, I was back in with 2 positions that looked great to me at the time. NUAN https://www.tradingview.com/x/RCnc6Et3/?aff_id=15325&offer_id=10 and SDGE https://www.tradingview.com/x/j7JIDFH3/?aff_id=15325&offer_id=10.
DAILY CHARTS (indexes): https://www.tradingview.com/x/hbZDrchY/?aff_id=15325&offer_id=10
WEEKLY CHARTS (indexes): https://www.tradingview.com/x/jxAP6JUx/?aff_id=15325&offer_id=10
MONTHLY CHARTS (indexes): https://www.tradingview.com/x/xfEyeWjx/?aff_id=15325&offer_id=10
Deep Dive Video