5/9/2018 Markets rally led by FAANG stocks. QQQ breaks through key 167 resistance level. MU jumps 5% on positive outlook from Morgan Stanley.

Fun Fact #45

Companies do stock splits to “signal” to shareholders that their company is doing well.  A secondary reason for a stock split is to increase liquidity (more easily converted to cash) by allowing people to purchase shares at lower prices.  Let’s say you had $1,000 and wanted to invest in Amazon, but since the share price is currently near $1,600, you wouldn’t be able to buy any Amazon.  If Amazon did a 10 to 1 stock split, making the share price $160, you would be able to buy 6 shares with your $1,000! 


 

 Market Stocks 5_9_2018.PNG

 

Although yesterday I was quite bearish because the price action was hinting that we would close red today, since we closed green, I maintain my bullish bias from 5/7.  Google hit my “if wrong” target after jumping nearly 3% today.  

I’m still skeptical on Apple’s current price action and think it will pullback to 180 soon, but the markets don’t care about what I think.  


 

QQQ 5_9_2018.PNG

QQQ broke above a key resistance level at 167 today.  This is very bullish, but beware that since everyone looks at the same chart, this could be a classic “bull trap.”  Bull traps occur when bulls get baited into buying right as price reverses sharply lower.  

 

BABA 5_9_2018.PNG

Generally, I’ve found that if BABA drops when the market goes up, this is a sign that BABA will drop further.  We will likely find out if this is true after tomorrow’s close.  

 

CMG 5_9_2018.PNG

Chipotle (CMG) has been trading in a very tight range in the last 2 weeks.  Look for a breakout in either direction either above or below the rectangle that I’ve highlighted in the chart above.  You can buy CMG on a break above 430, and short it on a break below 415.  Or you can be aggressive and just short it when it hits 430 with a tight stop.  I favor a downward breakout with a target of 390.  

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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!

 

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!

 

4/25/2018 Chipotle (CMG), and Advanced Micro Devices (AMD) surge 10% after earnings beat. Facebook (FB) pops up roughly 7% on earnings beat, dragging QQQ up ~1.2% in afterhours trading.

Fun Fact #35

Did you know that “hodler” is the misspelling for a “holder” of bitcoins? I think it’s funny to call bitcoin buyers “hodlers” instead of using the term “bag holders.” 

Market Stocks 4_25_2018.PNG

Since earnings season affects all stocks (as you can see with Facebook’s massive earnings beat dragging up the entire market afterhours) it’s basically gambling for me to set targets right now. From price action alone, I’m bearish on the QQQ. However, I would only consider shorting QQQ if it reaches 162. For bulls, I think it’s good to hold until QQQ hits 162, or just sit on cash to add shares when QQQ tests the 150-154 support zone. 

Chipotle (CMG) and Advanced Micro Devices (AMD) are up roughly 10% in afterhours after solid earnings beats. Today was a good day for the bulls. 

Yesterday (4/24/2018), I gave my analysis of QQQ on TradingView, a great charting platform. My username is bigfry on there as well. Anyways, below is what I said:

“Although I think we are currently due for a nice bounce back upwards, I wouldn’t be surprised to see QQQ rapidly drop and retest the 150-154 zone in the next few days.

The main reason I think shorting near 162 makes sense is because QQQ could not sustain the breakout of the 162 level. Failed breakouts move strongly in the opposite direction of the previous trend because a lot of traders are trapped near the previous highs, and panic sell out of fear of losing even more.

If QQQ does rally upwards, and you like short selling, I think shorting at or near 162 with a stop loss near 167 makes sense. You profit target would be the 152-154 range. This trade has a RR of about 2, which is quite good.

For a reference, I don’t like short selling uptrending stocks, so I’m waiting to buy QQQ in the 150-154 support zone.”


 

I’m glad MU bounced quite hard today, as it shows that sellers are losing pressure, and buyers are taking control of the price action again.  Also, I’d look like an idiot if MU kept dropping after I said yesterday that MU was a “screaming buy.”

QQQ 4_25_2018.PNG

Here’s the QQQ. The horizontal line at 154 represents the bottom of the trading range, meaning this level is a very important support level. 162 is a minor resistance level that QQQ had trouble pushing through in the past. 

The markets actually sold off quite hard in the morning, but clawed back the losses and closed slightly green.  I’ve noticed that in the last couple days, the market has sold off hard in the morning, but rallied towards the end of the day.  This is a sign of “smart money” moving in to buy stocks.  The “dumb money” represents the retail traders (like you and me, sorry).  Apparently we do the opposite of what we are “supposed” to do. 

I would like to get to know you better, so if you’d like, please shoot me a message on stocktwits or tradingview. You can also email me at nharwit@gmail.com. 

Good luck tomorrow, and have a great rest of your Wednesday!