Traders,
Happy 4th! I hope you all had a wonderful long weekend with Friends and Family.
As always, I look forward to sharing some of my top ideas as we head into the week.
Following on from my previous Watchlist and most recent couple of IA meetings, ‘rotation’ has been the keyword. But one wants to be careful now. Yes, rotation has been rampant, with an exceptional breakout in Biotechs, for example, with awesome follow-through. But only realizing that now, and forcing trades in relatively strong sectors may not be the way to go going forward. As always, you’d rather wait for a pullback in biotechs and pockets of technology like cyber to reset, prove a higher low, and signal potential continuation, rather than chasing multi-week highs coming into the week.
Alright, with that being said, here’s what’s on my radar coming into this new week:
Thoughts on Biotechs (IBB): Absolutely awesome multi-week breakout and continuation in biotechs. Now, as I mentioned in my recent IA meeting, biotechs and a couple of other pockets have shown great r/s. But chasing at current prices doesn’t make sense to me at all. So, with no position in Biotechs anymore, what am I looking for? Ideally, over the coming week, I’d like to see either a multi-day pullback or multiple days of consolidation. A reset, if you will, to tighten up price and allow the 10-day to catch up to price. Whether we pull back closer to the 10-day for a continuation long entry, or we consolidate for multiple days before breaking out again for a momentum swing entry, I’ll be watching closely for another setup to present itself.
*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.
SPCX General Thoughts: SPCX continues to be range-bound, and as a result I’ve been hands-off the name. 165 and 170 are the main areas of resistance, with 150 of course being the all-important support level. Unless this clears and bases above or below either main level, there’s nothing to do in my opinion, unless you’re just range trading the levels. As mentioned previously, I’ll just be paying attention to price action around those key areas and, as always, looking for clear signs of strength or weakness.
*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.
CIEN Momentum Short: Heavy selling and weakness into the end of last week in the photonics space. The best entry in CIEN, when it failed at the 10 and 20-day SMA has come and gone, from a swing short point of view, so now I’ll be focused on a potential intraday momentum short. Specifically, I’d want to see CIEN take out Thursday’s LOD, continuing to show some r/w. I’d get short sub Thursday’s low against HOD or the breakdown intraday spot, looking for follow-through toward / sub 400 initially, and remain in with a core until the structure breaks intraday.
*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 MU / DRAM / SOXL Sector Thoughts: I won’t go over every name in the space, so I’m going to bunch it all together here. I previously discussed the momentum change a week+ ago, and that has played out well thus far. From a short-term trading perspective, I won’t be chasing weakness early on in the week, though. Rather, if we get any major gap-down/capitulatory-type action in the am, I’d be looking for long opportunities. So, take SNDK for example. If we get a gap down / major wash sub or near its 50-day SMA, I’d look for “the right side of the V” type action to go long intraday. Similarly, if we cut below Thursday’s low in SOXL and flush closer to 160 / 150, I’d be looking for a higher low/capitulatory volume intraday / right side of the V type action to position long intraday.
*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.
CCXI Continuation: Following on from my thoughts last week and in my IA meeting on Thursday, CCXI gave an awesome add spot on Thursday when it came close to SSR and near 15 support, before reversing and closing at highs. I’ll continue to look for washes to get bought into key levels for adds, whilst trimming into outlier strength and intraday extensions.
*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.
Apart from the above-mentioned, I will focus on in-play intraday move-to-move trading, with a hit-and-run style working best in the current environment. There are also a number of developing charts across the board, from financials to biotech to utilities to cyber, but all need more time to develop and prove themselves. Let’s see what this week brings! Goodluck