The Wagner Daily – 3 Growth Stock Setups for Monday

The Wagner Daily – June 21, 2021

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MTG Market Timing Model – buy mode due to strength in Nasdaq Composite (still above 20ema)

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:

•    $SE buy stop triggered for a 3% add.

Commentary:

The Nasdaq Composite closed out last week’s action with a higher volume distribution day, giving back much of the prior day’s advance. The heavy volume was due to quarterly options expiration, which makes it difficult to judge the distribution.

The daily chart of the Nasdaq Composite is in pretty good shape provided that the price remains above the 20-day EMA on a closing basis.

The rotation out of cyclical leadership has finally taken its toll on the S&P 500, which sliced through its 50-day moving average last Friday.

Our focus remains on growth stocks with three official setups for Monday’s session.

First up is an add in $CRWD above the base high. The eps rating is below 80 but that isn’t a concern as we are looking at the last few quarters of monster eps and sales growth. Also has 2022 yearly eps estimate of 44%, along with an A- accumulation distribution rating (a/d rating). All ratings and eps/sales data discussed in this report is from marketsmith.

Next is a pullback entry in $NET which cleared its base high last week on heavier than average volume. Our buy limit order is about 2-3% above the base high, which is fine. We don’t want to buy much higher as that would make it difficult to hold through a minor shakeout with a 6% stop. Although $NET lacks earnings sales growth is  40-50% along with an A-  a/d rating and 1.5 up/down volume ratio (anything at or above 1.4 is strong).

The last setup is $SHOP which did not trigger from Friday’s report but is still live.  When a stock rips off the lows of the base without much of a pullback we are forced to buy the base high, which is fine at the beginning of a new rally (a few weeks in).  Buying an obvious base breakout with no handle 10 weeks into a rally is a different story.

$SHOP has a ton of liquidity with great ratings all around. The a/d rating is A- along with a very high 1.8 up/down ratio. Earnings and revenue growth are huge at 958% and 110% respectively last quarter! 

This report is focused on liquid growth stocks with excellent earnings and/or sales growth that can move. Stocks such as $CRWD, $NET, and $SHOP are must owns for us. We don’t catch them all, but we try our best to position the model portfolio in liquid leaders.  

Position size in the model portfolio is conservative at 7-10% to allow for 10-12 positions at once. We do this to keep the report a bit more active to appeal to swing and position traders. If the goal is to outperform the market, then position size should be at least 15% or more depending on experience and risk appetite.

$PATH is not an official setup but could be in play later this week with a bit more chop.

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

• $WKHS – buy at 15.65 (swing trade)
• $EOSE – buy at 20.22 (swing trade)
• $FUBO – buy at 30.30 (swing trade)

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