9/22/2018 QQQ stays flat while DIA and SPY reach new all time highs. BABA and MU mostly flat this week. Detailed weekly charts and analysis this week :) Please enjoy!

Let’s look at some weekly charts since we haven’t done that in a while. 

QQQ 9_22_2018.PNG

The QQQ has continued to grind upwards, and although I think we will continue to move higher in the next few weeks, I expect a 5%+ correction (possibly >10%) within the next two months.  The reasoning for this drop is the bearish rising wedge, which is confirmed by negative RSI divergence.  QQQ keeps making new highs, but the RSI reading fails to make a new high.  

The price target of a broken rising wedge is calculated by the largest distance of the wedge, which happens to be about 20.  The bottom of the wedge is at 180, so a break of that trend line suggests a price target of 160.  

 

The SPY and DIA performed significantly better this week, both reaching new all time highs.  

 

BABA weekly 9_22_2018

Here’s BABA on a weekly timeframe.  BABA is having issues breaking through the 165-170 level, which was previously strong support.  That level is now acting as resistance.  My first thought would be to purchase BABA near the previous low at 150, and then buy another batch between 100-110, and finally buy more at 80-90.  Of course, these are long term support levels to watch for, and these levels can mostly be ignored if you are trading on much shorter time frames (like I used to do).  

MU weekly 9_22_2018.PNG

From a 5 year perspective, MU looks extremely bad to buy at this price level.  Maybe I’m just finding too many obvious sell signals, and having a big bias towards where I think the price will go.  Here are some reasons why the price looks bad here.

  1. MACD crossed below 0, and the last time that happened, stock price collapsed >60%.
  2. Same pattern of RSI divergence on the weekly chart
  3. From the above reasons, we can see that clearly the upward momentum is gone

Here’s where I think price will go based on my weekly price analysis.  Within the next month, if we break below 40, in the following 3 months, we will see a price in the low 30s. Following that, we will continue to grind lower for the next 4-6 months until we bottom out in the low to mid 20s in May-July of 2019.  

Again, we could easily retest the 50s, and then move lower, or just move higher from here.  Price is telling me that the top has already been reached.  

Oh and one thing, this time the volume is significantly higher than the last time the cycle ended.  I have no idea what that means.  Another thing to consider is that the company announced a 10 billion dollar buyback which is planned for fiscal year 2019 (October 2018 to September 2019). 

It’s interesting that the cyclical cycle is projected to end in May-July range in 2019 (by my pattern recognition skills), which is when their buyback roughly ends.  Perhaps the company has already predicted a collapse in their stock price and are trying to stabilize it.  

Hopefully this post can make up for me being a day late last week.  

Good luck, trade safe, and have a nice day!  Thanks for reading.  

9/18/2018 QQQ bounces off channel support. BABA and MU continue to slide lower.

Hi everyone.  I just realized that I posted yesterday that I missed the blog post on 9/18, but today is also 9/18 hmm… I guess it must have been just past midnight when I looked at the date yesterday.  Anyways… here’s QQQ:

QQQ 9_18_2018.PNG

I mentioned 2 Fridays ago that I was expecting a move down in the indexes.  That has happened, but now I suspect QQQ will bounce back to the 187 area by sometime next week.  As you can see, QQQ has bounced off the 50 day moving average the last couple times, which also happens to be the bottom of the trend channel I drew in the chart above.  

BABA 9_18_2018.PNG

BABA is now below 160, and looks like it will slide even further.  I still love the company fundamentally, but would stay away due to the technicals not looking good.  There’s a slight chance I will buy some at or below 153 (the previous low), but will probably stay away for now.  

MU 9_18_2018.PNG

Although MU bounced strongly off the low 40s towards the end of last week, I would avoid buying any right now, unless it is for a very quick bounce trade.  Like I mentioned in previous posts, I think MU is entering the downward cyclical cycle now, where DRAM and NAND prices drop significantly and MU stock plummets.  Again, this is just a guess, and I could certainly be wrong.  I think in the next 3-6 months, we will see MU in the mid 30s.  

9/10/2018 Markets drop from last week with technology stocks dropping the most. MU drops a lot, and BABA continues to struggle.

Hi everyone!

Last week the markets dropped quite a bit off all-time highs, and now we are looking at a possible recovery (at least in the next few days).  I think this is the next leg down, so selling your positions, or going short into the next pop up might be a good idea.  

Also, I believe that MU is now nearing the end of it’s cyclical cycle, and will continue to drop further in the next 6-12 months.  

BABA has also had some bad news, which has lead to it dropping below 160.  This may be a good buying opportunity.  

Here’s a chart of MU below. 

MU 9_10_2018.PNG

Notice how price has moved below the 200 day moving average, and has stayed below that for a while.  This looks extremely bearish to me, and hints at further downside. 

 

BABA 9_10_2018.PNG

BABA is at 156.1 as of this writing.  Although I think this is a good price to add for the long term hold, the short term (2-4 weeks) points at more downside.  I’m leaning towards buying some here for a long term hold.  I will update you if I decide to buy some shares.  

9/3/2018 Indexes move mostly sideways this week. I still prefer staying out of the market or being short here.

Hi everyone! Let’s look at charts for DIA, SPY, and QQQ.

DIA analysis 9_3_2018.PNG

If you prefer trading with the trend, it’s probably a better idea to wait for a pullback in the indexes, then go long for a better risk reward ratio.  If you are aggressive, you may decide to short DIA with a target of about 251-253, and a stop loss near 262.  

SPY analysis 9_3_2018.PNG

The SPY, which tracks the S&P500, also has the same gap as DIA.  Staying long here in the short term doesn’t make much sense, so I recommend either selling now and waiting to buy on a dip, or going short here.

QQQ analysis 9_3_2018.PNG

I originally mentioned that QQQ would be the top choice to short, but now it looks much stronger than the other indexes.  I’m neutral on the index with a slight lean towards being bearish still.  However, I would short DIA or SPY instead of QQQ at this point.  

8/28/2018 Markets reach new all time highs as trade deal with Mexico sparks a rally.

Greetings everyone!

Today’s post will be more detailed since we haven’t had one of those in a while.  I had a summer class and relatives/friends over so I had quite some stuff to do.  I also recently started playing a lot of poker cash games (No Limit Texas Hold’em).

Below are the daily charts of the indexes:

QQQ Daily 8_28_2018.PNG

The chart of QQQ is above.  Notice that we’ve made a new all time high, but the RSI indicator did not make a new high.  This RSI divergence suggests lower prices ahead (within the next 2 weeks).  I plan to short QQQ near 185 with a target near 178, or slightly above 178.  The stop loss will be about 3 dollars above my short entry.  This is a risk reward of about 3 to 1.  

SPY 8_28_2018.PNG

The SPY 500 is looking more healthy than the QQQ.  This new high is confirmed by an RSI with a similar reading on the previous high.  Although I’m slightly bearish on the SPY, I wouldn’t short it, and would rather short the QQQ.  

DIA 8_28_2018.PNG

The DIA chart looks similar to the SPY chart, so I won’t waste your time discussing it.

MU 8_28_2018.PNG

MU has been a great trading vehicle for me over the last year or so.  Anyways, I mentioned that I would be looking to aggressively buy in the 46-50 range (suggesting on the lower side), and that has proven to be a good plan 🙂

However, something concerns me with this chart so I no longer have a position anymore.  The last three times MU rallied off a low, it retested that first low and then recovered.  I’ve drawn those three rallies in on the chart above.  Notice how the length of those moves are about 6-7 dollars each.  

I suggest selling your entire position here (as a swing trader) and look to buy below 49 again (preferably near 46).  I also think that this may be the start of a new downtrend, so you may want to avoid buying MU for the long haul.  Of course, you can still swing trade it back up (or down).

Thanks for reading, and have a great week!