6/16/2018 Weekly review and next week’s forecast. I found some more pullback setups!

Market Stocks 6_16_2018.PNG

I’m bearish in the short term (next two weeks), and you can see that reflected in my targets for June 29th.  I hate fighting the trend though.  Even if we move up, I expect very muted gains (no more than 3% higher). 

I’ve added three more stocks to the watchlist.  I’ve added a long position (at $46.9) on Alcoa Corp (AA) with 2% risk to my account instead of my normal 1%.  The stock checked off every single box I had on my trading plan. 

For reference, I’ve only found two other trades in my 10 months of trading that checked off all the boxes.  Those two trades were MU trading at 47.4 and BABA trading at 167.  I exited those positions recently near 59 and 206 respectively.  

Unfortunately, AA immediately dropped 5% the same day I bought it.  Sometimes you find the “perfect” setup and trade everything according to the plan, but the trade still goes against you.    

Let’s look at my analysis of AA, and then we will look at the major indexes. 

AA Trade 6_16_2018.PNG

Here’s the AA trade that is in my trading journal.  It’s a little bit more messy than my normal entries, but hopefully it’s easy to understand.  RR = Risk Reward, SL = Stop Loss. 

If we snap back above 47 in a couple days, that would signal a false downside breakdown and I will probably be adding to this position and raising my stop loss up.  

 

QQQ Daily 6_16_2018.PNG

I mentioned last week that I expect QQQ to retest at least 170, which I still think is the most likely scenario.  It might take 2-4 weeks for that to happen since volatility has died down. Thus, I am not adding any long positions and will be buying QQQ in the 167-170 zone with a reasonably tight stop loss.  

I have not changed my opinion on the other indexes (DIA, SPY, and IWM) since last week.  

If the markets drop, I expect DIA to test 243, SPY to 272.5, and IWM to 163.

Thanks for reading! 

5/27/2018 Weekly Charts of the Indexes

QQQ Weekly 5_27_2018.PNG

Above is the weekly chart of QQQ.  Notice that QQQ has run into overhead resistance at about 170.  The daily chart has formed a bull flag, which hints that a break above 170 means we run to 178-180 in a couple weeks.  As of 8 PM Mountain Time (10 PM Eastern Time), futures are up quite a bit, so I’m expecting a strong up-day on Tuesday.  

The concerning thing on this weekly chart is the negative RSI divergence.  Notice how we’ve made a higher high in March, but the RSI did not make a new high.  Currently, the RSI is only at about 60, and we are approaching a new high again.  As a bull, I wouldn’t be concerned unless QQQ breaks below 155.  If we break below that, I’ll be mostly looking to short sell 🙂

 

SPY 5_27_2018 Weekly.PNG

The SPY is a bit weaker than the QQQ, but is still holding up nicely.  Bulls want to see a breakout above 280, and bears want to see a weekly close below 260.  My bet is that if SPY drops to 260, we will have a lot of panic selling as I think that support level won’t hold.

 

DIA analysis 5_27_2018 Weekly.PNG

The DIA looks very similar to the SPY.  I think if DIA breaks and closes below 235, we will see a lot of panic selling.  Perhaps we could see a drop to something like 220.  Bulls want to see a weekly close above 253.  I think there’s a better chance we move up and break above 253.  

See you Tuesday after the market closes! 

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!

 

4/22/2018 A look at the major indexes. Targets updated for Friday May 4th.

Fun Fact #32

Did you know that at the Seattle Amazon headquarters, there are 6,000 dogs that share the work space with the employees? They even have a doggie deck 😀 Source


 

4_22_2018 Market Stocks.PNG

I’ve updated my targets for May 4th, 2018. I’ve refrained from updating the targets for stocks that have earnings in the next week because earnings are extremely unpredictable. However, I do favor a run-up prior to earnings, which I reflect in my targets for QQQ, DIA, SPY, AAPL, and BABA. 


 

I’m cautiously optimistic because the indexes have dropped to a support level that I believe will hold, but if they don’t hold, look out below! I also like buying the first pullback after a strong move upwards, which would be right now. 

QQQ 4_22_2018 Daily.PNG

The daily chart of QQQ is above. The index has gap filled the 163 gap with a rapid downward move largely due to Apple. The last time QQQ had a fast rally up from the February lows, we pulled back to this level (162-164) before moving to all time highs around 175. I think something similar could happen this time, but earnings from the big companies need to be good next week. I’ve drawn a horizontal line in at 160, since this is the weekly trend channel support. As long as QQQ holds that level, I believe we have a good chance to at least gap fill to 170 within two-three weeks. Take a look at the weekly chart of QQQ below.

QQQ 4_22_2018 Weekly.PNG

I’ve highlighted the touches of the trend channels with the colored arrows in the weekly chart of QQQ above. Notice how good this trend channel is at capturing price movement. 

DIA analysis 4_22_2018 Weekly

On the weekly timeframe, DIA (the ETF that tracks the Dow Jones) is stuck right at the middle of the support and resistance levels. This makes it hard for me to make a decision on the direction, but I favor it running up to the 255 resistance level rather than it hitting the 235 support level. This is a tough call to make. 

SPY weekly 4_22_2018.PNG

Notice how the weekly chart of SPY (the ETF that tracks the S&P500) looks identical to the DIA chart. We are stuck in the middle of the support and resistance level so it’s hard to pick a direction. 

To wrap up, I think the indexes have a good chance to move up early next week since they are currently at support levels and I expect good earnings from the big technology companies like Google, Amazon, and Facebook. From a longer weekly perspective , the SPY and DIA are still in the middle of the trading range, so patient traders looking for good prices should wait to buy near the bottom of that range, and look to sell at the top of that range. That would be buying at roughly 235 on the DIA, and 255 on the SPY. You would sell near 255 and 280 respectively. 

Have a great Sunday!

4/20/2018 Markets sell-off with Apple leading the move down.

Fun Fact #31

Did you know that in the Chinese Stock Market, once a stock rises or drops 10%, the trading is halted for the day?


 

I will do a weekly analysis update on the major indexes and FAANG stocks tomorrow or Sunday. I will also update my targets sometime this weekend.

AAPL 4_20_2018.PNG

AAPL dropped over 4% today and pulled all the major indexes down significantly. I was honestly quite surprised by the sudden move downwards. I think there’s a good chance that Apple recovers within the next couple weeks as it bounces off the 165 level. I’ve highlighted a relatively strong support level in the chart above. Notice how many times Apple bounced off the 165 level. Apple will be reporting earnings in early May so be on a lookout for that. 

AAPL 4_20_2018 Weekly.PNG

The weekly chart of AAPL (above) looks very similar, with 165 being a level AAPL has bounced off of multiple times in the last couple of weeks.