Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA DKNG RL ICE GO
Before the Bell is premarket prep for active traders. The note provides detailed stock market technical analysis focused on the indexes and FAAMGs. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.
Earnings
Although we are on the downside of earnings mountain, still plenty to keep us busy. Lots of retails names to note: WMT, HD, TGT, KSS, M
Companion Video
The video is a detailed technical review of the indexes and FATMAAN names. All the key trading levels are identified along with commentary and trade plans for each ticker. Trade ideas are also discussed. Run the video at 1.25x to reduce run time.
Find the Video HERE
Growth Launches
Thursday saw markets extend the rally off the opening low seen on Wednesday morning. The combination of calming crypto markets, a pullback in commodities, and easing inflation fears gave equities the breathing room to take on more risk. We also saw treasury bond yields fall back. THe combination of falling yields and commodity price pull back apparently has given the green light for traders to pile into growth and sell many re-opening names / sectors. The FATMAAN names jumped and have seemed to have new life. Nothing changes narratives quicker than a change in price. Last week the narrative was avoid tech because of inflation and rising rates; this week FATMAAN got too cheap given their robust earnings profile. Narratives aside, this choppy market demands a hyper-focus on charts and levels. During 2020, many traders got bailed out from a market that rewarded traders for being long anything that wasn’t nailed down. Now we need to be more selective and make sure we are taking objective shots. No doubt markets will soon flip again from growth back to value. I think its a market where you take profits when you can and not get too far out over our skis with lots of duration trades.
Trade Set ups
$DKNG – 60 min
Former darling, DraftKings saw price drop about 20% in the last rug pull. Now price is trying to recover. THe 60min chart has a bullish ascending triangle formation. A break above $45 would open up some running room to $48 as T1 and possibly even $52 as T2. As far as trading, active traders could trade a breakout on short time frames or for those that want to swing it with a longer duration, you can get long against $45 with a stop below.
$GO – Grocery Outlet
This grocer recently gapped down leaving a $5 gap above. It bottomed out at $32.75 which aligned with a prior low. Since the gap down, price has been trapped between $32.75 – $35.50. THis sets up perfectly for a bracket trade. Alarm the range, then follow price either below or above the range. Note. I have alarmed $33 for a price move back to the bottom of the bracket. If the bottom of the bracket is reached it would set up a nice long against say $32.50 for a move simply back up to the top of the bracket at $35.50. Then with any luck maybe a break into the gap.
$ICE – Intercontinental Exchange
I showed this one the other day as a potential short. As you can see, price never closed below the range and the short never triggered. Now price has recovered the prior trading range thus making it a very objective long with the target being the top of the box / trading range at $118. You can place a tight stop just below. With $6 of potential upside vs $2 of potential downside, it meets the 3 to 1 Risk / reward threshold we try to achieve on out set ups.
RL – Ralph Lauren
This retailer gapped down yesterday and now sets up as a bracket trade. Alarm the levels shown on the annotation; then, as always on bracket trades, the idea is to follow price on breaks outside the range.
INDEX CHARTS
A detailed walk-through of the levels and trading strategy for the indexes is given in the video ( link above) . The static charts are provided for reference. The FATMAAN names are also reviewed in the video along with trade ideas and other charts of interest. SPY and QQQ are on Daily SELL signals.
SPY 2 hour
SPY 30 min
QQQ 2 hour
QQQ 30 min
IWM 2 hour
$IWM 30 Min
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