The Wagner Daily – February 23, 2022
Below is the full, archived issue of The Wagner Daily swing trading report (sent to members the night before the publication date).
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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.
- Per intraday alert, covered $AAPL and $SNAP shorts. Stopped out of $TER at breakeven.
Although Tuesday was a rough session overall for the market as most indices closed -1% or more lower, the daily charts of the Nasdaq 100 and S&P 500 futures are at or coming into a big area of support.
S&P 500 futures didn’t touch the prior low but has quite a bit of support in the 4,200 area.
Nasdaq 100 futures undercut the prior swing low and closed back above, which could lead to a short-term bounce.
We saw the undercut and rally action in the Nasdaq 100 as a bullish sign in the short-term, so we made a judgment call to lock in gains and cover all open short positions Tuesday afternoon. Stocks could continue to slide lower, but we are content to exit $SNAP and $AAPL with a small gain. $TER hit our breakeven stop so no harm done.
Our nightly scans did not produce much in the way of actionable setups on either side of the market. There wasn’t much out there in terms of low-risk shorts with markets down several days in a row. As for longs, IBD breakout setups are off the table in an ugly market with no buy signal. Stocks showing relative strength near highs like energy are struggling as of late with volatility picking up due to Russia/Ukraine news. Without energy, there is almost zero leadership on the long side.
There are no new official setups for Wednesday. Below are a few charts we are monitoring on both sides of the market.
$TER hit our breakeven stop and reversed lower by the close. A break of the two-day low could put $TER back in play. This is not an official setup.
$BLDR reversed lower on Tuesday with a pick-up in volume and could be in play on the short side if the market remains weak. There is decent resistance around $70.
Just to be balanced, here are a few longs to watch.
$DDOG is still in pretty good shape and could be in play IF the market reverses higher.
$DOCS is still holding on the low of the big volume gap up day, which is constructive action in this market. If the market is strong on Wednesday, look for $DOCS to be in play over the 8-day EMA.
Unofficial Setups – For experienced traders only, no guidance is given for these setups.
- Longs – watching $DDOG and $DOCS, $ZIM $KSKP $VRTX
- Shorts – $TER $TXG $CHRW $BLDR
See you in the chat room,
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.
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