market timing model:

Buy
– Signal generated on the close of April 30 (click here for more details)

today’s watchlist (potential trade entries):

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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. Net P/L figures are based a $100,000 model portfolio. 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.

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closed positions:

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ETF position notes:

• Stop in $SMH is now for the full position.

stock position notes:

• $BLOX stopped us out after an ugly 2-day selloff. Note that we are selling $PRKR at market on the open.

ETF, stock, and broad market commentary:

The market continues to impress, setting new swing highs in all major averages. Nasdaq stocks led the market higher with a 0.5% gain, bolstered by the strength in the semiconductor index. Our long position in the semiconductor ETF ($SMH) continues to run higher, and we are now up nearly 9% with a very tight stop in place to lock in gains.

With the market extended in the short-term, our scans have not produced much in the way of actionable setups the past few days. We continue to monitor the action in the solar ETF ($TAN) for a low risk entry point. iShares North American Tech-Software ETF ($IGV) has also caught our eye after breaking out from a two year long consolidation. The monthly chart shows the recent breakout, followed by two months of basing action above the highs of the prior range.

On the daily chart below, we see how the lows of the current base found support around $66, which was the high of the two year long consolidation. When prior resistance levels are broken they usually become support in a healthy market.

After breaking the downtrend line of the consolidation, $IGV is now back above the 50-day MA, with the 20-day EMA about to cross above the 50-day MA. Note that the 50-day MA is also well above the 200-day MA. The setup is not actionable right now, and needs one or two weeks of tight price action above the 50-day MA to produce a reliable entry point.

$UNG has pulled back to and undercut the 50-day MA this week. This is the first pullback to the 50-day MA after a significant reversal of trend, so we expect support to come in around the 50-day MA by the end of the week.

Note that we raised the stop in $SMH to 37.96 for the pull position. As long as $SMH holds the steep uptrend line, it has a chance to rally to the 39.50 – 40.00 area sometime next week.

$P bounced back after a rough day off selling. $BLOX sold off sharply yesterday, hitting our stop just below $21. The setup could still work, but the price action is a bit too loose and may need some time to digest yesterday’s volatility. Note that we are selling $PRKR on the open Thursday (for a scratch) because it reports earnings after the close.

We have one new setup on today’s watchlist in $UA. Its relative strength ranking is lagging at 62; however, it has been in base building mode since last August. $UA has sound fundamentals, with solid revenues and an EPS growth rate of 27%. $UA is an institutional quality stock that trades 1.5 million shares a day on average with a $58 price tag, so its growth and liquidity will attract plenty of institutions.

$UA is currently forming the handle portion of a cup and handle pattern:

$UA closed above the high of 5/6 yesterday, which is a buy signal. Since the price action has already triggered a buy, we are waiving the 5-minute rule in today’s setup. So to be clear, we will not be using the 5-minute rule today in $UA, and will buy on the open IF our buy stop is triggered.

relative strength combo watchlist:

Our Relative Strength Combo Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. This list is comprised of the strongest stocks (technically and fundamentally) in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Combo Watchlist can be downloaded by logging in to the Members Area of our web site.