--> Pullback buy entry setup after high momentum breakout in iRobot- $IRBT

Pullback buy entry setup after high momentum breakout in iRobot- $IRBT

market timing model: BUY

Current signal generated on close of Feb. 13.

Portfolio exposure can be anywhere from 50% to 100% long (or more), depending on how open positions have held up.

Past signals:

    • Sell signal generated on close of February 3.
    • Neutral signal generated on close of January 24.
    • Buy signal generated on close of November 13
    • Buy signal generated on close of September 9
    • Neutral signal generated on close of August 15
    • Buy signal generated on close of July 11
    • 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.

$todays watchlist
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closed positions:

open position summary
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ETF position notes:

  • $BDCL buy entry triggerd.

stock position notes:

  • Canceled $FEYE buy setup for now. We’d like to see one more shakeout bar print before buying.
  • $VNDA and 1st half of GERN buy entries triggered over the 5-minute high.


ETF, stock, and broad market commentary:

Most broad market averages stalled on Friday, after failing to hold a move above the prior day’s high and closing near the lows of the day.

Total volume picked up on the Nasdaq Composite, but since the index only dropped by -0.1% it was not an official distribution day. That being said, tech stocks failed to move out on higher volume, which is stalling action. It would have been a clear cut day of churning (distribution at the highs) if Friday’s close in the Nasdaq was -1.0% or more off the highs of the day (it was only -0.5%).

$NASDAQ STALLING ACTION

How the Nasdaq holds up if/when it touches the 10-day MA should tell us whether it is ready to push higher or needs more time to digest the last wave up.

The chart of the S&P 500 ETF ($SPY) below shows a bit of stalling action on Friday. But the stalling was mild compared to last Wednesday’s clear cut churning, where the close was about -1.0% off the highs of the day.

$SPY pullback to 10ma

The $SPY has not been as strong as the Nasdaq, and could possibly sell off to the 50-day MA, especially if top banking stocks are unable to hold current support levels.

Although most commodity based ETFs have ripped higher the past few weeks, ETFS Physical Palladium ETF ($PALL) continues to consolidate in a tight range at the 10-month moving average. The volume has dropped off considerably since 2011, which is a bullish sign overall.

$PALL MONTHLY DOWNTREND LINE BREAKOUT

The monthly downtrend line is valid with several touches since 2011. A break of this downtrend line should produce a decent breakout given the length of the consolidation.

We do not mind taking positions prior to a breakout in stocks/ETFs that have been in consolidation mode for 2-6 months. However, when the price action has been consolidating for a year or more we feel it is best to wait for the breakout before getting in.

On the stock side, we have one new buy setup in $IRBT.

$IRBT moved to new all-time highs on big volume two weeks ago and went sideways last week on lighter volume.

IRBT light volume consolidation

The weekly volume pattern looks very bullish since $IRBT reclaimed the 40-week MA (in orange) 10-weeks ago. Last week’s big volume breakout to new highs suggests that $IRBT is potentially ready to make a significant advance in 2015.

We are looking for an entry on slight weakness to last week’s low. We are placing a buy limit order just above $43. This order will trigger only if the price action hits our entry.

$IRBT PULLBACK ENTRY

We have a tight stop in $WDAY to lock in gains ahead of earnings. We plan to hold $SCTY through earnings, which are Monday (2/24) after the bell.

$FEYE buy setup is canceled for now, but we will continue to monitor the action.

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