The Wagner Daily – Intraday Alert: $F Bought on Breakout

The Wagner Daily – January 13, 2022

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MTG Market Timing Model –  Nasdaq (sell), S&P 500 (working on a new buy signal)

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Our timing model was designed to keep our trades in line with the prevailing market trend, not to call tops or catch bottoms in S&P 500 or Nasdaq Composite.

today’s watchlist (potential trade entries):

open positions:

closed positions:

position notes:

• Per intraday alert, bought $F and shorted $FIVN.

Commentary:

The S&P 500 closed above the 20-day EMA for the second day in a row on day three of a new rally attempt. The action wasn’t ideal, as the price closed below the open and just below the midpoint of the day’s range. However, the S&P is above the 20 and 50-day MAs and only 2% off its all-time high.

Energy ($XLE), financials ($XLF), and materials ($XLB) are in play on the long side but $XLE and $XLF are a bit extended. Within $XLB $MOS and $FCX are in play with $FCX.

Per intraday alert, we bought $F on a breakout from a tight range on the hourly chart at the 20-period EMA. The hourly chart below shows our entry. The daily chart has formed a bull-flag like pattern.

Tech stocks continue to lag as $QQQ stalled just below the 20-day EMA and the 61.8% fibo level. The bounce is ideal action for shorting some of the weaker areas within the Nasdaq such as software.

Like the S&P, $QQQ also closed below the open and below the midpoint of the day’s range. A break of Wednesday’s low would increase the odds of further selling and a test of the swing low.

Per intraday alert, we shorted $FIVN on a break of the prior day’s low and the 20-day EMA in anticipation of a breakdown from a 6-week consolidation at the lows (below the 10-week MA).

There is one new official setup on the short side in $MSFT. We are selling short beneath Wednesday’s low looking for a test of the swing low and a possible breakdown to the 295-300 area.

Unofficial Setups – For experienced traders only, no guidance is given for these setups.

• $PFE – buy stop 57.53
• $FCX – buy at 45.55
• $OKTA – sell short in the 211-216 area looking for the price to stay below the 20-day EMA +1%.
• $FB – sell short below 331
• $FTNT – sell short below 318 on a breakdown or short a bounce into 325

See you in the chat room,

Rick

For those new to this report, our share size is pretty conservative with max. size around 10% of equity per trade. We do this because we prefer to trade 10-12 names to keep the report active.  However, if your goal is to maximize returns, taking 18-25% positions is the way to go.   If trading in a non-margin account, this will limit the portfolio to 4-5 positions.  If on margin, then 8-10 positions. Our risk per trade on average is just over 1/2 of 1%. Experienced traders may want to risk 1% to 2% per trade.   For example, a 20% position in a 100k account with a 6% stop loss would result in a $1,200 loss (1.2%). 

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