Traders,
I hope you’re all having a wonderful long weekend! Regarding general thoughts and adjustments, nothing has changed since my comments during Thursday’s IA Meeting.
So, without further ado, let’s get straight to some of my top focuses coming into the week.
Continuation in DG: Consumer Staples continues to outperform the market YTD. Although I think we’re getting pretty close to a period of digestion and consolidation in staples, it’s still worth keeping an eye out for fresh setups within the sector. Like COST from last week, which I’m long and discussed in detail on Thursday. DG is another staple name that’s held up extremely well. Tight consolidation, converging 5,10,20-day SMA, and a nice shove last week Friday. I’ll be looking for any dips/holds above Friday’s high to add long for the swing. Trailing against the 10-day / prior day’s low.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Other names in the staples sector forming tight consolidations above key rising SMAs: CHD, TGT, GIS.
Now, in terms of further potential market weakness…If the market attempts to bounce and we get a lower high near the 50 – 20 – 10 – day, and re-test / break below the 100-day / Friday’s low, then here are some stocks that will be high up on my list for relative weakness and potential intraday momentum short opportunities:
MSFT
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
SoFi
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
PLTR
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
On the other hand, if the market begins to firm up, here are two stocks I like outside of the leading energy and staples themes that have held up exceptionally well and displayed monster relative strength to the broader software and tech sector:
MU
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
SNDK
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Small-Caps on Watch for the Upcoming Week:
JDZG: Impressive reclaim Friday morning. And it followed that up with an even more impressive squeeze out into the close. Following that price action, I’d be looking for a push on Tuesday into $3.5+ and some failure to get short against the HOD.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
RIME: Friday’s small-cap flavor. Did an excellent job here grinding into the close, only to squeeze out shorts viciously into the close and AHs. Tough to have a pre-set plan here – it depends on where this opens in the PRE on Tuesday, and how it acts near key levels. Hopefully, it holds up with volume.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
MLEC: Tiny float, and although it gave back a chunk of the move on Friday, I’ll be keeping it on the radar for a potential liquidity trap Wednesday +.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
For now, that’s it. Shortened week ahead…BUT…
An Important Reminder: The Supreme Court has designated Friday, Feb 20, as the next day it will issue opinions. It’s possible that a decision could be made on tariffs.