4/26/2018 Facebook surges over 9%, and Chipotle jumps almost 25%. Amazon and Intel are up about 10% today. As a result, QQQ is over 164 in after hours. Lastly, MU is doing well :)

Fun Fact #36

Since Amazon surged after-hours today on a huge earnings beat, why don’t we look at Bezo’s dog? Damn, that is one cute puppers. 

Image result for bezos dog

Market Stocks 4_26_2018

I’ve removed my three targets on the major indexes because I realized having them there made no sense until after earnings season is done. I did think we would bounce, but not this hard. My portfolio aint complaining 🙂

Amazon and Intel surged after hours. We will look at their charts after tomorrow’s close. Microsoft also beat earnings, and is up a decent amount after hours (2-3%). Also, Chipotle managed to go up nearly 25% after good earnings yesterday.

Let’s look at the daily chart of Chipotle below. 

CMG Daily 4_26_2018.PNG

Notice the strength of today’s move. Not only did Chipotle (CMG) gap up, but also moved up another 30 dollars on the day. Additionally, CMG closed near the day’s high, displaying further strength. 

CMG weekly 4_26_2018.PNG

Here’s CMG on the weekly time frame. Although I rarely trade with the RSI (Relative Strength Index), I did observe that when Chipotle reaches or nears the overbought RSI reading on the weekly chart, it tends to drop significantly.

I will add CMG onto the watchlist tomorrow, along with AMD. 

QQQ 4_26_2018.PNG

QQQ ran up past the 162 overhead resistance today, and then closed a penny below 162. However, QQQ closed after-hours at 164.20, which I circled in the chart above. 

Have a great day!

 

Advertisements

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!

3/23/2018 Market Indexes, FAANG, MU, and SQ

Fun Fact #8

Did you know that when a company declares a dividend, the stock price goes down by the same amount of the dividend? This is done to prevent arbitrage opportunities. An arbitrage opportunity is when you make money without taking any risk. 

Usually the dividend being declared is a small amount, so the drop in the stock is not noticeable. 


 

Today was a stressful day for me, and probably for some of you as well. I somehow ended up slightly positive despite purchasing shares of FB and AAPL in the morning. FB has now broken below 160, so I was stopped out. My QQQ put saved me, but I noticed something strange about the pricing of the put. Although QQQ was down about 5 dollars, my put option gained less than 3 dollars of value. After talking to a Charles Schwab employee, they told me that this is because the market is anticipating QQQ not staying down for long, and that the demand for puts isn’t as high (buyers don’t want to pay as much for the put). Hmmm interesting…

I’ve noticed that MU, SQ, and AMZN have all crossed their 20 day EMAs after a powerful move up to all time highs. I think you should consider adding these stocks to your portfolio or at least put them on your watchlist.

I will analyze the indexes tonight or tomorrow, so be on lookout for that. 


 

MU reported earnings last night. The report seemed decent, but I think that since MU had an overextended move up prior to earnings, it sold off today. Additionally, the market has been selling off violently the last week which has dragged it down. 

MU analysis 3_23_2018.PNG

The current price looks like a good entry to go long based off the pierce of the 20 day EMA. However, this entry is quite aggressive given the political uncertainty right now. I said screw it and added a small position anyways. My QQQ put will protect me if something horribly bad happens with the tariffs. 

A close below the breakout location of 50 would signal to me that this isn’t a normal pullback, and the resumption of the uptrend might not continue for a while. Entering here gives a nice reward to risk ratio of about 2:1, given you put a stop slightly below the breakout location, and a profit exit near the 52 week high in the 62-64 range. 


 

The SQ chart looks similar to MU. The reason for the drop today is also probably for the same reason. SQ had a really nice run-up, and has sold-off violently along with the market. I would look to buy at these levels since we’ve got a healthy pullback to the 20 day EMA. This trade is very similar to MU. If SQ fails to hold the breakout level of 50, this would signal to me that this isn’t a normal pullback. Again, if the entire market decides to sell-off again next week, it would be tough for SQ to swim against the current and continue it’s uptrend. 

Notice the touch of the 20 day EMA below. Before I move on to Amazon, notice that the volume for SQ is relatively light, whereas MU had a big volume sell-off today. 

SQ analysis 3_23_2018.PNG


 

AMZN analysis 3_23_2018.PNG

I mentioned in yesterday’s post, and some previous posts that the 1450-1500 range was a minor support level for AMZN since this was the previous breakout location. I’ve noticed that after the last two earnings reports, any dip is aggressively bought up. Why should this time be any different? Unless the market sells-off again next week, I would be looking to start scaling into this position. 


 

Summary: The markets violently sold off in the afternoon and closed near the low of the day. This is almost identical to what happened last month, so my thought is that you should consider adding aggressively on any subsequent dips. 

I’ve been thinking about writing a stock trading/investing book that could benefit people of any skill level – from the complete beginner to seasoned veterans. The way I would provide value to the beginner is by explaining concepts, terminology, chart patterns, etc. in a simple and entertaining way. Speaking of entertainment, I hope to add some personal anecdotes in the book to make it a more interesting read.

I also plan to hand count all the times the stocks in the S&P500 bounced off a pierce of the 20 day EMA when certain criteria are met. Some criteria might be if we are in a bull market, if a support zone is hit, a no earnings driven drop from an all time high/52-week high, sector differences, etc. This statistical study would provide value not only for my own trading and the seasoned veteran, but for any trader that needs a solid trading system.

If you like what I write, please tell your friends and family members to come check out my blog. Word of mouth can really do wonders. 

Have a great day~