5/6/2018 Weekly Analysis and Stocks to Watch!

QQQ Weekly 5_6_2018.PNG

The weekly chart of QQQ is above.  I’ve circled the lower tails displaying buying pressure, as well as highlighting a divergent high.  A divergent high means that the index/stock made a higher high, but the RSI indicator made a lower low.  That is bearish.  However, we are still in an uptrend, so it’s generally a better idea to buy on dips instead of short selling high points. 

SPY weekly analysis 5_6_2018.PNG

The weekly chart of SPY is currently stuck between the support and resistance area.  That makes the direction unclear, although currently, there’s more evidence supporting a move up. 

BABA weekly chart 5_6_2018.PNG

Look at the weekly chart of BABA above.  I’ve mentioned in multiple posts that BABA was a good buy in the 165-175 zone, and a good sell in the 190-200 zone.  BABA is now approaching the 190 area, which represents a good price to sell at.  However, I believe BABA can hit 200 on this move up before pulling back because BABA had good earnings last Thursday.  Note that a break and close above 205 on the weekly chart would be very bullish.  

MU weekly 5_6_2018.PNG

Here’s the weekly chart of MU.  I think MU is a good long term hold and represents a good swing trading opportunity here.  As long as MU holds 45 on the weekly chart, I think we retest the highs near 60.  Do note that we’ve made a divergent high.  Like I described in the QQQ chart near the top of the page, this is bearish.  As you can see in the chart, prices fell from the recent high. 

AAPL 5_6_2018 Weekly Chart.PNG

Apple broke out to an all time high (ATH) after selling off hard in the last few months. Although Apple is up 13.25% in just one week, the chart hints that Apple has enough juice for another move up before pulling back.  If we move up, I suspect a test of 190 since it’s a nice round number. 

CMG weekly 5_6_2018.PNG

Chipotle (CMG) recently broke out upwards after releasing a very strong earnings report.  Judging from the price action and moving averages, I think CMG will pullback to at least the 380-400 area from a weekly perspective, which is another 5-10% down.  Of course, the upward momentum could easily carry the stock higher too, but my bet is down. 

Thanks for reading!

 

6 thoughts on “5/6/2018 Weekly Analysis and Stocks to Watch!

  1. For the MU trade published on 5/6/18, I won’t have go for it as the negative divergence between the RSI and the prices were present, this is bearish signal and that would have ‘scared’ me off. I am impressed with your analysis and recommendation. How did you know that the 47.8-45 weekly candle stick have a higher probability to stop the price from falling further? Is it because the RSI is reaching the 50% mark the 3rd time?

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    1. Hey Keith, thanks for the comment and the kind words! I noticed that MU dropped into a support zone (46-48 ish), and since MU is in an uptrend, I banked on the fact that the uptrend would resume. I did not know whether or not the weekly candle would push price further down, but I stuck to my trading plan which paid off nicely. My trading plan put simply is to buy stocks on pullbacks to support zones. Also, my stop loss was just below 45, so it was a very low risk trade (profit target near 60). Please let me know if you have any more questions 🙂

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  2. Hi bigfry, your plan worked brilliantly as your have planned, well done on your handsome profit. I wished I would have came across your blog earlier, lol, so I could take this year too. I would like to know how you define that 46-48 ish supply zone. This is very interesting. Was it based on certain weekly candles or just a certain % pullback, or indicators, or something else? Or just your logical thinking?

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    1. I can see visually on the chart that price struggled to break through that level in the past (resistance) on December 20th, 2017, and January 4th, 2018. Resistance levels tend to turn into support when retested. Price also bounced off 46 on March 2nd which hinted to me that buyers would get aggressive around 46-48.

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  3. Thanks bigfry, it make sense on the resistance turned support, I see and understand that now. So instead of a resistance turn support line, I’ll make it into a zone for future analysis. As I mentioned, I won’t make that trade as the negative divergence would have scared me off, and I would have doubted that the support zone would hold due to it. But you did it, hence you got the profit. Waiting for your 5/22 post 🙂

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