Bullish reversal candle in SolarCity ($SCTY) for momentum breakout

market timing model: BUY

Current signal generated on close of November 13.

Portfolio exposure can be anywhere from 50 to 100% long. If positions are holding up well, then one can add exposure beyond 100%.

Past signals:

    • Neutral signal generated on close of November 6.
    • 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:

  • Sold $PSP for a small 1.8% gain. We lowered our tight stop in $FAS due to the rising 10-day MA, which is just below.

stock position notes:

  • The buy limit order triggered in $TSLA and we are now long. Closed $KNDI for a 60% gain.

ETF, stock, and broad market commentary:

Stocks closed out December and the year with a strong run over the past two weeks, with most averages setting a new 52-week high on the last day of trading.

The NASDAQ Composite is currently sitting about 2% off resistance from the summer highs of 2000, around the 4,260 to 4,290 area. If hit, this level could produce a few weeks of consolidation in the NASDAQ.

The main averages are extended in the short-term and possibly due for some sort of pullback next week, but look for support to come from the rising 10-day MA.

We have one new ETF setup on today’s watchlist in iShares Mexico Index ($EWW). $EWW has spent just about all of 2013 in consolidation mode after breaking out to new all-time highs in Q4-2012. On the monthly chart below, we see that the pullback found support at the prior all-time high, which is a bullish sign.

There was a big shakeout candle that dipped several points below the $65 support level, but that is also a bullish sign, as the price action did not return back below the lows of that candle. Also, one must keep in mind that support is more about an area, not just a line.

$EWW monthly pullback

Dropping down to the daily chart, we see several, major higher lows already in place, which is a great sign. Since the correction was so long, the 50-day MA is still below the 200-day MA, which isn’t ideal, but note that the 50-day MA is now trending higher.

$EWW broke the downtrend line of the consolidation in December, and has since held above the 50-day MA while consolidating around the 200-day MA.

The price action has tightened up nicely, so we look for $EWW to breakout from here and possibly run to the $71 – $72 resistance level before slowing down. This is not a quick swing trade setup, as we are looking for an eventual breakout to new all-time highs (a potential 3-6 month hold).

$EWW cup and handle

$EWW trade details can be found on the watchlist above.

On the stock side we have one new setup for today, which is an add in SolarCity Corporation ($SCTY) over Tuesday’s reversal candle off the 10-day MA. Because we are entering off a reversal bar at support of the 10-day MA, it is a GONG setup (go or no go). This means that the trade should work out right away, if not, then we exit and patiently wait for another buy signal to emerge.

$SCTY reversal candle

We closed out $KNDI for a 60% gain on Tuesday. This is exactly how these lower priced setups are to work. We want to buy them with small size and look for explosive moves in the 30-50% range in a few weeks or less.

These stocks are not A rated because they lack liquidity or top fundamentals, so we do not feel comfortable overstaying our welcome once the move has been made. This is what we are trying to achieve with trades like $SSNI, $TKMR, $SSTK, and $OTIV. These stocks are the quick hitters, while we take our time with the A rated stocks like $FB and $LNKD.

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