Continuation breakout in medical stocks ($IHI)

market timing model: BUY

Current signal generated on close of July 11.

Portfolio exposure should at least be 75% to 100% long or more (if you can go on margin).

Past signals:

    • Neutral signal generated on close of July 5
    • Sell signal generated on close of June 24

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today’s watchlist (potential trade entries):

$todays watchlist

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open positions:

Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Changes to open positions since the previous report are listed in pink shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits. Click here to learn the best way to calculate your share size.
$todays watchlist

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closed positions:

open position summary

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ETF position notes:

  • Note the 5-minute rule will not apply to the $FCG setup. $EWJ buy entry triggered. $USO buy stop was cancelled because it opened up more than 1.3% above our trigger.

stock position notes:

  • $ATHN buy setup triggered.

ETF, stock, and broad market commentary:

Stocks woke up from a two-week nap on Thursday, with most major averages up at least 1.0% or more on the day, and closing at new swing highs for year. Although volume was lighter on both averages, price action is king, and at this point in the rally we are more concerned with heavy volume down days than light volume up days.

Thursday’s advance was broad based, with about 150 groups up 1% or more more, and only 3 or 4 groups down more than 1%. Unfortunately, solar stocks were one of the few groups to close negative on the day, sending $TAN to close below the 10-day MA. Because of this, we are raising the stop in $TAN on the shares added only. The stop remains loose on those shares from the first entry point.

With $SMH climbing back above the 50-day MA, our ETF holdings are in decent shape and could see some nice follow through next week. We added $EWJ to the portfolio on a gap up above the 50-day MA. $FCG remains a live buy stop order, but we will not be using the 5-minute rule since $FCG did close above the two week high.

Our long position in iShares U.S. Medical Devices ETF ($IHI) is back in trend mode after a six bar consolidation above the 10-day MA. Yesterday’s gap to new swing highs could lead to a another 2-3 points of upside. The trade should be in good shape in the short-term as long as the price action holds above the dirty uptrend line. We call it a dirty uptrend line because there are a few candles that the line crosses through, but we have always taken the approach that technical analysis is part art and part science. With trendlines, we go with what makes sense.


On the stock side, we entered one new position in $ATHN. We have one new buy setup in HomeAway ($AWAY):

After two false breakout attempts in July and a recent washout below the 50-day MA, $AWAY might be ready to reclaim the 50-day MA and push higher within the next few days. $AWAY is basically in a go or no go situation here, so we do not mind taking a shot on the long side with small size. We are betting that those who were long from higher prices have been washed out, and the stock is now free to run higher. If the price can move back above and hold the 50-day MA, then we will look to add to the position if/when possible.


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