The Wagner Daily – $FOUR Stock Consolidation Play Above Trend Line

The Wagner Daily – October 18, 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 along with open and closed positions:

 

position notes:

• Note the new buy stop for a 1/3 position in $RBLX

Commentary:

The Nasdaq Composite recovered from a disappointing close last Friday and regained the prior major swing low (around 10,600) on day 3 of a new rally attempt. The earliest we can see a follow-through day (a 1.5% or more gain in a major index) is Tuesday, day 4 of the rally.

Since we have the potential for a follow-through day buy signal on Tuesday, let’s run through a few leading stocks that we are monitoring for an entry.

$RBLX gapped up in reaction to news and reclaimed the 50-day MA on big volume (3x greater than average).

The big volume gap up from a valid basing pattern is a bullish sign for the next few weeks. Some would think that the 20% move is too much in the short-term, but if conditions are improving, $RBLX could push much higher.

With the potential for a follow-through day, we are buying a 1/3 position in $RBLX over the gap-up day high with an 8% stop. We would also use a buy-stop limit of $44.20 to guard against a bad fill if there is a significant gap up. This is an official setup.

$FOUR is in consolidation mode and could be in play over the $47-48 area, which would put the price above the downtrend line and 50-200 MAs.   No entry yet.

$SWAV is still on our watchlists as its currently in a 21% deep base with a relative strength line that could set a new high ahead of price (the RS line is the light green line below price).

A break of the 50-day MA and downtrend line would be a buy signal. No entry for now.

Other stocks to watch: $ELF $HQY $SG $CELH

Unofficial Setups –

• Longs – none (but watching several stocks for potential entry points this week)
• Shorts – none

See you in the chatroom,

Rick 

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