4/24/2018 Markets Slump and QQQ breaks through a key minor support level. MU is a “screaming” buy.

Fun Fact #34

Did you know that lump sum investing (investing all your money when you get it) is significantly better than dollar cost averaging (investing a fixed amount spread out over time)? Here’s the source from Time magazine. 


 

Market stocks 4_24_2018.PNG

As you can see, the stock market sold off really hard today. The major indexes did significantly better than the FAANG stocks, with most of them selling off over 3%. The Russell 2000 index (IWM) only dropped .57%, signaling that small cap stocks are still holding up nicely. That is the one reassuring thing about today’s price action.

As I was saying yesterday, I believe that if QQQ broke through 162 and closed below it, I would turn bearish. That is exactly the case. You can see that I’ve switched sides for my targets. However, I am not short, and wouldn’t advise shorting until QQQ retests 162. Your target would be 154 since that is the next support level down. 

In conclusion, I still prefer sitting on cash over shorting an up trending market. 

I do favor a bounce upwards in the next few days, but I think we are ultimately heading lower to retest the previous lows since QQQ broke through 162. 

IWM 4_24_2018.PNG

Above is ticker IWM, which is the ETF that tracks the Russell 2000 Small Cap Index. 

QQQ analysis 4_24_2018.PNG

Here’s the QQQ. Since we broke through and closed below 162, I would either sit on cash until QQQ tests 154, or be aggressive and short QQQ if it retests 162 from blow. 

MU analysis 4_24_2018.PNG

I think MU is a screaming buy here because this trade presents an excellent risk:reward ratio. Also, MU has fallen into a support region highlighted by the rectangle above while being in an uptrend. Your stop loss would be placed at or near 44, with a profit target somewhere between the mid 50s to low 60s. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s