The Wagner Daily – NVDA Stock Update: Ready to Rally?

The Wagner Daily – July 26, 2021

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MTG Market Timing Model – buy mode 

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 $SNAP due to the big volume breakaway gap.

Commentary:

$SPY, $QQQ, and $IWP closed out a bullish week of trading by setting a new swing high last Friday. The theme of this rally remains the same, major indices continue to push higher with fewer stocks participating. Despite the lack of breadth, there are a decent amount of growth names pushing higher, so this rally remains in play for our style of trading.  

Per intraday alert, we purchased a starter position in $SNAP due to its big volume breakaway gap up.  The 24% gain was confirmed by a 580% increase in volume! A monster day that should lead to higher prices over the next 3-6 months provided that the market remains healthy.   If $SNAP takes out Friday’s high and holds, then look for the price to follow through to the upside with Friday’s closing price as support.

There is one new setup for Monday’s session in $SMAR, which is fleshing out the handle portion of a cup with ahandle pattern. Note the strong volume on the rally up through the 50ma and declining volume during the pullback in the handle. The entry is over the handle high (standard entry). There are a few earlier entry points within a handle that can be taken for partial size, such as the high of a reversal candle (if one forms) or the break of a short-term downtrend line.

$SMAR lacks earnings but has at least 8 quarters in a row of +37% to +53% sales growth. The accumulation distribution rating is a B+ (B or higher is desired). The up/down volume is 2.2 (very high, 1.4 is solid).

$NVDA reclaimed its 10 and 20-day EMAs last week and may be ready to move higher within the next few days if the price holds the moving averages. We are already long from our entry on 7/20, which was based on the prior day’s reversal candle. We plan to hold $NVDA through earnings (8/18) as long as we have a decent profit buffer of 7% or more.

The weekly chart of $ZI below is not an official setup but it is worth monitoring for an entry once earnings are out of the way (8/2). The weekly chart has produced a bullish basing pattern since March 2021, with the price sitting in a tight range above the rising 10-week MA. A move through resistance at $54 – $55 could lead to an explosive rally.

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

• $SI – buy at 106.20 or 106.54 for quick pop  (bull flag like action off  the lows, a five-day pattern)
• $MQ – buy at 27.14 for a quick pop (downtrend line break from tight range at 10ema)
• $CRCT – buy at 38.20 (hourly downtrend line break for a quick pop)

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