We remain long iPath Coffee ($JO) from our entry on Feb. 12 over the two-day high. Although the price action has yet to move to a new swing high, it has formed a tight trading range above support from the rising 10-day MA.
$INVN is a potential breakout on multiple time frames, which is why we like the setup so much. After gapping up on big volume, it has pulled back on lighter volume to last week’s high.
We have one new setup on the watchlist and that is in $CMG, which recently gapped to new highs from earnings and held. Volume was big on the gap up and the price action has basically gone sideways in a tight range, allowing the 10-day MA to catch up.
We plan to hold A rated stocks $FB, $TSLA, and $SCTY through earnings. To produce big returns we eventually have to hold through earnings, which is fine as long we are holding an A rated stock. After a breakaway gap up to new highs and a strong follow through in $KORS, we are patiently waiting for a low risk pullback entry to emerge. Could $KORS follow last year’s gap up in $FB?
Italy ETF ($EWI) and Spain ETF ($EWP) have held up surprisingly well the past few weeks and are still trading above the 10-week MA. The 10 and 40-week MAs are still trending higher on both weeks charts with a higher swing low in place (so far)
Friday’s accumulation and close above the 50-day MA was a step in the right direction for the Nasdaq. However, the Nasdaq must now hold above the 50-day MA this week and avoid printing more distribution days.
The monthly chart of $LNKD is in great shape. However, if the morning action breaks the two-week low and holds, then odds are that $LNKD may have much more work to do before heading higher.
We have one new buy setup on today’s watchlist in $FB. There are two potential entry points in $FB (in our opinion). An aggressive entry is on a breakout above the two-day high. If the breakout in $FB coincides with the market breaking above Wednesday’s high, then we could see a decent advance in $FB as the market bounces from oversold conditions.
Our timing model is currently in sell mode. However, we have noticed the Nasdaq Composite has held up relatively well against the S&P 500 and Dow Jones. Looking at a daily chart of the Nasdaq vs SPY below, the Nasdaq is still trading above the prior swing high and is well above the 200-day MA.
$LULU is a good example of a stock breaking down below key support levels after a monster four-year rally. The idea is once these stocks begin to crack, institutions must start unloading shares, making for some violent moves to the downside.