--> Internet stocks still holding up ($FDN)

Internet stocks still holding up ($FDN)


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

(click here for more details)

 

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:

  • Cancelled buy setups in $GSG and $USO.

stock position notes:

  • $VRX buy setup triggered. $CPA and $DDD sell stops triggered. $URI buy setup was cancelled.



ETF, stock, and broad market commentary:

The higher volume stalling action in the S&P 500 and NASDAQ , points to some churning in the market, which is a more subtle sign of distribution, where stocks are sold into strength by institutions. Along with the recent pick up in distribution days, the market is running into the meat of earnings season this week and next, so we can expect a pick up volatility along the way.

Our ETF scans have dried up the past two weeks and there are no new buy setups for today.

Open positions in $TAN, $FDN, and $IHI have held up well. $SMH is trying to recover from a false breakout to new highs and needs to hold at or around the 50-day MA. $USO needs to recover back above the 20-day EMA within the next day or two, or the odds will favor that the price action will remain range-bound for a few weeks.

Moving averages play a very big role in our daily analysis, and we rely heavily on certain averages to locate low risk entry and exit points. For gauging momentum in the short-term, the 5 and 10-day moving averages work very well. For example, if a stock or ETF is above the 5-day MA, there is almost no good reason to sell, unless the price has made a 25-30% advance in a few days. The 10-day MA is also a very good moving average to help ride the trend with a bit more wiggle room. For trend traders, no stocks or ETFs should really be sold while they are above the 10-day MA after a strong breakout. For example, look at the difference between $USO and $FDN at the highs. $FDN held above the rising 10-day MA minus a little shakeout, which is a sign that the momentum from the breakout is still strong.

$IHI TIGHT RANGE AT HIGHS

However, $USO failed to hold the 10-day MA, which is a sign that the momentum from the breakout is fading, so we sold 25% of our position on 7/25, knowing that a break of the 10-day MA could possilby lead to a deeper correction.

$USO PULLBACK TO 20EMA

While the 5 & 10-day moving averages are by no means a perfect system for exiting a position, when used properly, they allow us to stay with a trend and trade what we see, not what we think.

It’s time to do a little housekeeping on the stock side. $AMBA’s break down below the 50-day MA on heavy volume was disappointing. Because of the heavy volume break and close at the lows, we are selling all of $AMBA at market on the open. We are also selling all of $VRX at the market on the open due to yesterday’s false breakout, as we do not want to be long heading in to Friday’s earnings report. Note the tight stops in $RVLT, $TUMI, and $TAM as well.

$DDD’s reaction to earnings was negative. Although the price action closed off the lows of the day, $DDD will probably need some time to digest today’s action. Because of this, we are selling half of the remainig position at the open, with a stop below yesterday’s low for the other half.

$DDD reversal candle

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