The Wagner Daily – New Buy Setups: $DLTR Reclaims 50-MA

The Wagner Daily – February 15, 2022

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MTG Market Timing Model –  SELL

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:

• No trades triggered.

Commentary:

If Monday’s lows in the S&P 500 and Nasdaq hold, then we may see a short-term bounce into resistance this week.

There are two new official buy setups for Tuesday looking to play stocks that are showing strength.  

$DLTR reclaimed the 50-day MA last week and is now in pullback mode. Monday’s reversal candle is a buy signal, with the entry over Monday’s high. The stop is below the reversal candle low.

• Only 8% off the 52-week high with a group rank of 53 of 197 groups
• 12-month RS 93, 3-month RS 85
• Not shown is the relative strength line which is almost to new highs ahead of price.

$CNQ is tightening up on the daily chart during a 4-week consolidation near the 52-week high. $CNQ is a leading stock within the sector after an explosive breakout from its last base. Monday’s inside day is our buy signal with an entry over the two-day high. The stop is a bit loose for now below the 20-day EMA and swing low at $50.

• Only 3% off the high with a group rank of 1 out of 197
• 12-month RS 98, 3-month RS 97
• Relative strength line set a new high ahead of price (bullish sign)

Should the market selloff, $NET $CRWD $DOCN $TWTR are a few potential short setups that could be in play on weakness (break of Monday’s low).

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

• Longs –  watching  $BCRX $CMC
• Shorts – $NET $CRWD $DOCN $TWTR $SHOP (below Monday’s lows)

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%). 

This list is a good starting point for monitoring the health of the market for those who have limited time.

https://morpheustrading.com/services/swing-trade-alerts

• Longs – watching $BCRX $AOSL $CMC
• Shorts – $NET $CRWD $DOCN $TWTR $SHOP

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