The Wagner Daily – Bullish Engulfing Candles on Nasdaq and S&P 500 Weekly Charts

The Wagner Daily – March 21, 2022

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MTG Market Timing Model –  BUY as of 3/16 close

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:

Impressive reversal action off the lows in the major indexes last week.

S&P 500 – There is quite a bit of support in the 4,100 – 4,200 area with three bullish reversal candles off the lows in the last two months.

Last week’s action produced a bullish engulfing candle which occurs when the real body of the current candle opens below and closes above the body of the prior candle. The prior candle should be red . The engulfing candle shouldn’t have big wicks where the open and close are too far from the high and low of the day.

The Nasdaq Composite also closed with an impressive engulfing candle plus an outside reversal. The bullish outside day occurs in a pullback where the price opens below the prior day’s low and closes above the prior day’s high. This bullish reversal is confirmed by a move through the high of the reversal bar before there is a move through the low of the same bar. Also of note, Nasdaq produced a follow-through day last Friday with a 2% advance on higher volume.

There are no new official setups for Thursday due to the lack of low-risk buy points. We are patiently waiting for new setups to emerge after a brief pause or pullback.

For those who are new to the service, our system is based on trading growth stocks that can explode higher in a short period of time…when conditions are ideal. For most of 2022, conditions have not been ideal, so we have been playing the short side when setups are there while waiting for a new buy signal. Below are a few things we are looking for in a buy signal.

Keys to market turning bullish:

• Buy signal in the timing model, such as a FTD (follow through day) or reclaim of 21-day EMA
• Stocks begin to breakout on volume and hold… indexes hold the 21-day EMA
• Number of stocks making new 52-week highs vs 52-week lows enters into positive territory
• After first wave of breakouts, new setups emerge

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

• Longs – PSTG breakout above base high 35.20
• Shorts – none

Press HERE (link restricted to paid members) to view this week’s stock watchlist, an excellent starting point for monitoring the health of the market and finding the best stocks for swing trading.

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