7/19/2020 Analysis of longer term chart of Amazon ($AMZN). A long time blog viewer was interested on my thoughts.

Hi everyone, I hope you had a nice weekend. A long time blog viewer asked me where I thought a good entry was for a 1-2 year hold on Amazon. As a result, I’ve made this blog post solely on Amazon. Don’t hesitate to reach out if you also want a chart analyzed or have any other questions. 

Weekly chart of Amazon below (over the last 5 years). We are looking at the weekly chart instead of the daily chart because we are looking to hold for 1-2 years. 

AMZN Weekly 7_19_2020

I analyzed the drops Amazon had after making a new high, and circled the drops in the chart above. The average comes out to -24% from high to low, which would be a drop to ~2500. 

I prefer missing a trade that would have worked than to take a trade too early and lose money on it. However, a strategy could be to buy a 1/4th position at around 2500, and add the last 3/4ths position somewhere in the 2000-2200 level. 

To manage risk without a stop loss, I would keep the position size relatively small since Amazon is more volatile than the stock market, with a beta of about 1.3.

If you wanted to manage risk with a stop loss (recommended), I would put it near 1600, since any price below that would indicate a behavioral change. The largest drop in the last 5 years was 37% and a drop to 1600 would be a ~50% drop. 

If we are planning to sell near the previous high at 3300, a 2500 entry is mediocore from a risk/reward standpoint. If we plan to sell at a loss if it goes below 2000 (previous breakout level, which is now support), we are gaining 800 but risking 500 (risk/reward below 2:1). However, if we plan to sell near 3300 with an entry in the 2000-2200 level and a stop loss near 1600, that’s a risk of 400-600 for a reward of 1700, an excellent risk reward of 3:1 or 4:1. 

Again, since there’s a good chance Amazon won’t reach the 2000-2200 support level and reverse sooner, we could always take a small position near 2500 and plan to average down in the 2000-2200 support level. 

Happy Sunday, and thanks for reading! 

 

 

7/18/2020 Overall market is up this week, but QQQ drops. Thinking of going long on $TSLA, $NFLX, $SQ, $NIO if the market drops (or these stocks drop).

Welcome back to the blog! 

Stocks are still mostly grinding sideways or up slightly. Below is the weekly chart of SPY.

SPY weekly 7_18_2020

I don’t like prices up here for going long unless I was doing short weekly trades (less than 2 month holds). Over any longer time period (>2 months) and I think we are more likely to be lower than higher, we will see what happens. I’d want to be long near 300 and 275 for medium term swings (~3 month hold). Below I discuss some pullback trades I plan to go long on if SPY does pullback another 7% (to 300) and 15% (to 275). 

I’m considering going long on Tesla, Netflix, Square, and/or Nio on any more sustained weakness for a short/medium term swing trade. For example, although I don’t like Tesla from a fundamental perspective at all, the trend is still up, and once they report earnings next week, it could present a nice “buy the dip” opportunity for a swing trade back up. 

Same goes for Square, Nio and Netflix – although I think they are extremely expensive from most metrics, they present good short/medium term swing trading opportunities. 

I plan to hedge my bets with a couple of shorts in the technology sector to reduce my overall sector risk when going long though. Below are the charts of Tesla, Netflix, Square, and Nio, and where I plan to enter.

Tesla daily chart below (long at 900-1000): 

TSLA daily 7_19_2020

Netflix daily chart below (long at 400-450): 

NFLX daily 7_19_2020

Square daily chart below (long in 80-90 range):

SQ daily chart 7_19_2020

Lastly, Nio daily chart below (long at 8-9):

NIO daily 7_19_2020

Enjoy the rest of the weekend, and see you next week (unless we get a large market sell-off and I swing long 🙂 

4/14/2018 Monthly Chart of QQQ

Saving Fun Fact for Monday 😀

Monthly Chart of QQQ below

QQQ monthly 4_14_2018.PNG

For this current month (April 2018), we have formed a green candle. The chart doesn’t look amazing, but it doesn’t look as bad as when we were selling off hard at the start of April either. From a monthly perspective, the volume is above average, but still lower than February and March of 2018. 

If QQQ can hold 150 this month, we are still in a healthy uptrend. I think that if we close at or above 170 this month, the bulls will be in full control again.

4/9/2018 Low volume day – the big selloff in the afternoon wiped out most of today’s gain. Block orders in after-hours hinting at more upside tomorrow?

Fun Fact #22

Did you know that the Russian market (RTS index) dropped over 10% today? This was because of the new Russian sanctions that Trump imposed last night. You can read more about that here.


 

Market Stocks 4_9_2018.PNG

 

QQQ 4_9_2018

Today we saw a gap up on the major indexes with a follow through run up into the afternoon, but ended up selling off hard to close the day. The volume was still relatively low compared to the last two months, hinting that neither buyers nor sellers have control of the price action.

The Chinese stocks did well today and held onto some nice gains along with the rest of the technology sector. As you can see in my targets for April 20th, I am still bullish for the next 2 weeks largely because the overall sentiment is still very bearish. Here’s my source

Xi Jinping, president of China, will be giving a speech tonight and will address the trade concerns. This will almost certainly be the catalyst for tomorrow’s price action. 

I noticed some big block orders (on the buy side) in the early after-hours trading session through my level 2 quotes. This may hint that tomorrow is also an up day, but who knows. I still think it makes no sense to be net short (more positions short than long) at these levels, but we all trade differently. 

Big QQQ Buy orders.PNG

Take a look at the yellow colored orders on the right side. The yellow color signifies that the stock traded above the inside ask price, which displays the buying pressure. Here’s the source

Good luck tomorrow! I expect a wild ride. 

4/4/2018 Trade Wars Overblown? Buy when the market goes up on bad news. BABA, QQQ, TSLA, AAPL, MU.

Fun Fact #19

Did you know that Tesla (TSLA) stock went up over 34 dollars from the opening price today? That’s over 13% up from the opening price to the closing price.

I guess it’s true that TSLA stock moves as fast as its’ cars. 

TSLA 4_4_2018.PNG


 

4_4_2018 Market Stocks.PNG

Update: If tomorrow we close green, I believe my April 9th targets will be hit by April 16th instead (one week later). 

Today was a glorious day for me, and I’ve gained confidence as a trader. I didn’t sell into the morning gap down panic, and sticked to my trading plan. This morning, I asked myself, “Wait a minute, BABA is within the support zone of 165-175, and it is currently at 167.5 in premarket, why the heck am I not buying it?” And so, I closed my eyes and bought some shares at 167.5. I added some more at the start of after hours since I’m expecting a higher move tomorrow. 

BABA analysis 4_4_2018.PNG

 

Lesson I learned today: The worst time to sell is when your emotions and entire body are begging you to sell. 

 

Today the major indexes opened down about 2% due to trade war news escalating. Despite that, we ended up rallying hard and the major indexes closed up over 1%. Since we went up on bad news, I’m thinking we will close higher tomorrow.

QQQ analysis 4_4_2018.PNG

QQQ is back at the 160 level which is the key weekly level to hold. Another up day tomorrow will confirm that we’ve got a short term bottom in place. A test of the 162-164 range tomorrow would not surprise me.

AAPL analysis 4_4_2018.PNG

Take a look at the AAPL chart above. Notice how price bounced off the 165 level 5 times in the last two weeks. The rectangle I added shows the minor support level where buyers start getting aggressive. A close below the 165 level suggests a retest of the 150-155 zone. Since we are still above the support zone, I expect AAPL to retest the 175-177.5 level within two weeks. 

MU analysis 4_4_2018.PNG

MU has defended the 49-50 breakout level which is very bullish. The momentum has now shifted to the buy side. As long MU doesn’t close below the 49-50 support level, I think MU has a good chance to retest the 52 week high around the 60-64 level.

MU is down quite a bit in afterhours trading, but I don’t think this will sway the bulls tomorrow.

3/29/2018 Review and Setups

Fun Fact #14

You might have wondered: Hey Nathan, what does your username mean? Did you know that my username has an interesting story, and can also teach you an important lesson regarding life and trading?

Click here for the story. 


 

3_29_2018 Market Stocks

All I have to say is: At least my 2 week targets don’t look as ridiculous after todays’ move. 

QQQ analysis 3_29_2018.PNG

QQQ had a nice close to the week. It looks like the bulls are in control again since we closed within the weekly trend channel. Remember that I kept stressing the 160 level? The volume was also larger than on March 26th, which suggests to me that either more people are covering their shorts, or more people are buying at these levels. It could also be both.

This could also be large fund managers killing puts, since there was a lot of put buying last week. This is also a reason why I don’t think we go down from here, or at least not much if we drop. If we break below 155, I think we at least retest 150. 

If we close the day up next Monday on decent volume, I expect QQQ to quickly fill the gap at 170, but probably run into overhead resistance as well. 

DIA analysis 3_29_2018.PNG

DIA is still in a short term downtrend, but if we break above 245, we are well on our way to the 248-255 level. Although the bears are still in control, if nothing bad happens next week, I think we gap fill to 246 and then test 250.  

SPY analysis 3_29_2018.PNG

SPY looks just like DIA. A break and close above 265 signals we at least gap fill to 270, and probably retest the 272.5-277.5 zone. This could happen as early as next week given we don’t have bad news from the white house or have any negative tariff related news. 

FB analysis 3_29_2018.PNG

Out of the FAANG stocks, FB had the strongest bounce. Perhaps a lot of people were buying $160 strike price puts, so the large fund managers couldn’t let it close below 160 without losing a lot of money. FB is running right up into the 160 resistance level, but I wouldn’t be surprised if we move higher next week and reclaim or at least touch 165. 

AMZN analysis 3_29_2018.PNG

AMZN had a big gap down yesterday due to Trump going after Amazon on taxes. We are still in a strong uptrend, so if you’ve been waiting for this pullback/dip, now would be the time to start adding. 

AAPL analysis 3_29_2018.PNG

AAPL was up a good amount and then randomly dropped 2 dollars within the last 15 minutes of the trading day. The chart looks neutral/slightly bullish, with 175 acting as overhead resistance, and 165 acting as support. A break above resistance or below support would likely result in a large price swing in that same direction. Since AAPL is a large component of the QQQ and DIA, wherever AAPL goes, the market usually follows. Warren Buffett bought a lot of AAPL in the last 6 months, so I’ll just stay bullish and see what happens. 

NFLX analysis 3_29_2018.PNG

NFLX saw high volume buying today. It is bouncing off the 280-290 support level which is a good sign for the bulls. I expect 300-310 by next week on a follow through of today’s buying pressure.

GOOG analysis 3_29_2018.PNG

GOOG presents one of the best risk to reward opportunities out of the FAANG stocks (with FB and AMZN being close). Your stop loss would be below the double bottom formation at 1000 (something like 970 might be good), and your profit exit would be in the 1120-1180 range, depending on how greedy or conservative you are. 

BABA analysis 3_29_2018.PNG

BABA also had a nice bounce today. The last 6 candles look identical to QQQ. It didn’t hit the 165-175 range which is where I will be buying. There’s a gap to fill at 195, and I wouldn’t be surprised if we see BABA in the 190s next week. 

MU analysis 3_29_2018.PNG

I mentioned yesterday that I thought buyers would be really aggressive at these price levels, but it seems like the bulls are still hibernating. Perhaps Monday will be different. MU is still holding the breakout level of 50 which is a good sign for the bulls. Something about this chart just screams, “Buy me bigfry daddy!” Anyways, moving on…

SQ analysis 3_29_2018.PNG

SQ looks decent to buy here for a longer term hold (like 2-3 months), but we still haven’t reclaimed the breakout location of $50. The current momentum is still down, and we had very light buying volume today relative to the selling volume earlier this week. 

Tomorrow I will review some weekly charts. 

Have a great night, and I hope trading went well this week!