{"id":17492,"date":"2022-01-31T06:48:00","date_gmt":"2022-01-31T11:48:00","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=17492"},"modified":"2023-02-15T02:47:27","modified_gmt":"2023-02-15T07:47:27","slug":"swing-trading-stocks-013122","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/swing-trading-stocks-013122\/","title":{"rendered":"The Wagner Daily &#8211; Russell 2000: Undercut Rally"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/220131IWM.png\" alt=\"$nasdaq comp daily\" title=\"\"><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">The Wagner Daily &#8211; January 31, 2022<\/h2>\n\n\n\n<p><em>Below is the full, archived issue of The Wagner Daily swing trading report (sent to members the night before the publication date).<\/em><\/p>\n\n\n\n<p><em><strong><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">Subscribe now<\/a><\/strong> for your access to the best stocks for swing trading, proven Morpheus stock trading strategy, and market timing model with a 20-year track record. <\/em><\/p>\n\n\n\n<p><em>Just drop us a comment with any questions or comments&#8211;we&#8217;d love to hear from you!<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<p><a><strong><em>MTG Market Timing Model &#8211;&nbsp; SELL<\/em><\/strong><\/a><\/p>\n\n\n\n<p>Our timing model was designed to keep our trades in line with the prevailing market trend, not to call tops or catch bottoms in S&amp;P 500 or Nasdaq Composite.<\/p>\n\n\n\n<p><a><strong><em>today&#8217;s watchlist (potential trade entries):<\/em><\/strong><\/a><\/p>\n\n\n\n<p><img decoding=\"async\" alt=\"$todays watchlist\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/watch.png\" title=\"\"><br \/><br \/><a><strong><em>open positions:<\/em><\/strong><\/a><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/open.png\" alt=\"$open positions\" title=\"\"><\/figure>\n\n\n\n<p>`<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2020\/closed.png\" alt=\"$closed positions\" title=\"\"><\/figure>\n\n\n\n<p><strong>po<\/strong><strong>sition notes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No trades triggered<\/li>\n<\/ul>\n\n\n\n<p><strong><em><strong><em><strong><em><a><strong><em>Commentary:<\/em><\/strong><\/a><\/em><\/strong><\/em><\/strong><\/em><\/strong><\/p>\n\n\n\n<p>Stocks closed out last week&#8217;s trading with bullish reversal action on the daily charts of broad market averages. The S&amp;P 500 closed with a bullish outside day which occurs when the price undercuts the prior day&#8217;s low and trades above the prior day&#8217;s high. The close was also above the 5ma and 8-day EMA on the daily chart and above the 20-period EMA on the hourly. The strong afternoon action increased the odds of a short-term rally this week. As always, a break of Friday&#8217;s low within the next day or two would negate the bullish candle and suggest lower prices from here.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/220131SPX.png\" alt=\"$SP 500 daily\" title=\"\"><\/figure>\n\n\n\n<p>The Nasdaq held support and closed with a bullish outside day as well. A bounce to the 20-day EMA on the daily could be in play for both the S&amp;P 500 and Nasdaq Composite.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/220131COMP.png\" alt=\"$nasdaq comp daily\" title=\"\"><\/figure>\n\n\n\n<p>An undercut and rally day for the Russell 2000 ETF $IWM. The undercut and rally occurs&nbsp;when the price undercuts a prior low intraday but closes back above. This sort of action can often spark a short-term counter-trend reversal, especially when the price is extended from the 20-day EMA.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/220131IWM.png\" alt=\"$nasdaq comp daily\" title=\"\"><\/figure>\n\n\n\n<p>The timing model remains on a sell signal with Monday now day 6 of a new rally attempt.<\/p>\n\n\n\n<p>Given the bullish reversal action last Friday, the odds have increased for a short-term bounce in the market. If we were still short, then we&#8217;d likely cover at least 3\/4 of the position if not all, and trail a tight stop on the rest.<\/p>\n\n\n\n<p>Energy stocks are still sitting near highs and could be in play this week. Agriculture stocks ($CF $ADM) and shippers ($DAC $ZIM $GSL) are also strong.<\/p>\n\n\n\n<p>$CF is not an official setup but can be purchased near Friday&#8217;s high looking for the price to hold the 8-day EMA. Stop can be placed beneath the 1\/26 low.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/~rick\/\/charts\/2021\/220131CF.png\" alt=\"$CF daily\" title=\"\"><\/figure>\n\n\n\n<p>When a counter-trend rally occurs, some of the biggest movers are in stocks off the lows that are extended from the 20-day EMA on the daily chart. These stocks can run 15-20% or more in a few days and potentially touch the 20-day EMA. These are not the type of setups we focus on in the report as we run a trend trading system, but they do have some value especially when market conditions for growth are ugly. $TASK, $ONEM, and $BSIG are a few examples of extended to the downside.<\/p>\n\n\n\n<p><strong>Unofficial Setups<\/strong> &#8211; For experienced traders only, no guidance is given for these setups.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>$CF &#8211; buy near 71.20 (don&#8217;t chase if it rockets higher)<\/li>\n\n\n\n<li>watching $ERX for a bull flag<\/li>\n\n\n\n<li>$BROS &#8211; buy at 49.70 (reversal off lows)<\/li>\n<\/ul>\n\n\n\n<p>See you in the chat room,<\/p>\n\n\n\n<p>Rick<\/p>\n\n\n\n<p>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.&nbsp; However, if your goal is to maximize returns, taking 18-25% positions is the way to go.&nbsp; &nbsp;If trading in a non-margin account, this will limit the portfolio to 4-5 positions.&nbsp; 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.&nbsp; &nbsp;For example, a 20% position in a 100k account with a 6% stop loss would result in a $1,200 loss (1.2%).&nbsp;<\/p>\n\n\n\n\n\n\n\n<p>This list is a good starting point for monitoring the health of the market for those who have limited time.<\/p>\n\n\n\n<p><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\">https:\/\/morpheustrading.com\/services\/swing-trade-alerts<\/a><\/p>\n\n\n\n<p class=\"has-light-green-cyan-background-color has-background\"><em><strong><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">Start my Wagner Daily membership now<\/a><\/strong> to start receiving winning Morpheus stock trade signals, including a stock portfolio you can easily follow. <strong><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\">The Wagner Daily PRO<\/a> <\/strong>includes <strong>live swing trader room<\/strong> for daily, real-time trade ideas and powerful stock trading education. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An undercut and rally day for the Russell 2000 ETF $IWM. The undercut and rally occurs\u00a0when the price undercuts a prior low intraday but closes back above. This sort of action can often spark a short-term counter-trend reversal, especially when the price is extended from the 20-day EMA.<\/p>\n","protected":false},"author":2,"featured_media":12060,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[782],"tags":[],"class_list":["post-17492","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wagner-daily-archives"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/17492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=17492"}],"version-history":[{"count":2,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/17492\/revisions"}],"predecessor-version":[{"id":17498,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/17492\/revisions\/17498"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media\/12060"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=17492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=17492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=17492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}