Daily Profit Compass Jan 14

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Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA HA JETS STAY DKNG CWH

The  Daily Profit Compass provides stock market technical analysis for the stock market today and is 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 

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. There are 4 trade ideas discussed at the end of the video.

Run the video at 1.25x to reduce run time.

Find the Video HERE

News Flow

President elect Biden plans to share his covid relief / stimulus plan today. Not sure of the time.  News sources Biden first went to Sen Schumer to float a $1.2T proposal. To that Schumer said  ” try gain” we want a bigger package.  Now sources are anticipating a $2.2 – $2.5T package. No idea if this is baked into the market yet or now.

Near an Inflection Point

I think we are near an inflection point in markets. The problem is I don’t know which way it will break.  With Biden announcing his plan later today, it may spark a rip and we go full-blown retard. I keep this possibility open because it seems like a bubble is building in bubble watching. When everyone is calling a bubble will the bubble pop or do those people capitulate first?  Dont know.  I also know that the week after options expiration often act as inflection points.  I can easily see a pull back next week. With no sell signals I dont think it makes sense to try shorting all-time highs. That’s a losing trade.  At this point I am participating in the long side until there is evidence to justify a short posture.  I will be carefully looking at positions and trim or sell out of anything I dont really like heading into next week.

Market Insights

There’s been a definite skew to where the most gains are being seen as “retail traders” attack shares less than $10.

Call buying is going parabolic

With short interest continuing to fall

Trades about to Happen

$STAY – Extended Stay America Hotel

Hotelier STAY broke above a key resistance level yesterday.  Important because now price is in the prior trading range.  Thus the target is the top of that range; in this case $17.   Also there was a flurry of call buying 6min before yesterday close targeting the FEB 15.65 calls 3200x versus an average daily call volume of 164.  I mean why would some guy decide at 3.54pm to fire off 20x call volume.  I am curious about what he thinks he knows.  Traders can get long against $14.50 if you’re interested.

$DKNG – Draft Kings

I have $55.50 alarmed to get long on the break out.

$HA – Hawaiian Airlines

Alarm $21.50 for the breakout and get long.  Notice the $5 wide air pocket above to $27.50.  Once price is in the air pocket, it should move quickly to my target of $27.50.  Earnings are in 2 weeks on Jan 28.   If Biden’s covid relief plan includes special monies for airlines, price may move soon than we think.  While you are scoping $HA, flip through the other airlines while you’re at it. There are a few others setting up.  What attracts me to this one is the massive price void.

$JETS – Airline ETF

Another way to play airlines is to keep it simple and trade the basket. It eliminates since stock risk and thus is a safer way to play and would also allow you to hold the position through Airline earnings announcements that begin next week.  The option chain for $JETS is robust, well-traded and has good liquidity

$CWH – Camping World

On Tuesday the stock ignited with a power candle that took out downtrend resistance, overhead resistance, and above all the ema’s.  Earnings are after Feb option expiry. I like the idea of picking up Feb calls and staying long against $30.50 with a stop just below.

FATMAAN Names

In the companion video, I cover off the FATMAAN names using the daily timeframe. Some very interesting trade locations are on the horizon that will set up well for swing traders on the daily time frame.

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

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hr

IWM 30 min

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