Hi all! 👋
Wishing you all a Happy New Year 🎉 🎉 🎉
In this article, my first of 2023, I will cover:
General Market Overview
Review of 2022
Thoughts as we enter 2023
Sector Analysis - Which groups are breaking down vs showing relative strength
3 Helpful Scans with Results
The action displayed by leading stocks with TML potential
Links to TradingView watchlists
Stocks currently on my focus list with actionable trade ideas
Review of 2022
What was most definitely an extremely challenging year in the markets proved to be one of the most important I have ever traded as it really allowed me to navigate through this bear market we are experiencing and transform my style by adding new helpful principles to my overall trading system.
See the below thread I posted on Twitter for a more detailed review:
Thoughts As We Enter 2023
In my opinion, predictions are often useless and more of a distraction than anything else, it can also be dangerous to make predictions based off of historical tendencies such as how the market typically has positive returns the year after a negative one.
Such predictions are futile and typically backed by an author’s bias / ulterior motive - in the end, as always, the most important thing is blocking out the noise and following your plan.
Allowing noise from social media or any form of news to cloud your judgement could end up putting you in the wrong frame of mind as you go on to think just unidirectionally - you may have heard something similar to “the market has to go up” or “it cannot possibly go down more”, but the truth is, the market does not have to do anything - do not predict but rather react as we receive new information from the market every day.
ONLY PRICE PAYS.
One thing I would like to emphasize as we welcome 365 days of opportunity is the importance of being consistent - this means if you really want something you have to truly push for it and do what other people are not willing to do, therefore the key to success is building strong habits:
Be consistent with your process - Plan your routine and stick to it
Never stop learning
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” -Aristotle
General Market Overview
Strong daily closing ranges across the indices - inside days printed on the QQQ and IWM while the SPY reversed to close strong.
This is how they closed off 2022 for the year:
SPY -18.1%
QQQ -32.5%
IWM -20.4%
Sector Analysis
Despite the action of individual sectors looking relatively muted at first glance, what actually stood out to me when reviewing each chart individually was the strong daily closing range of each sector as all seemed to close well off their lows even if closing the session negatively.
See how healthcare - XLV 0.00%↑ fell down to the 50-Day moving average, found support, and closed at the upper end of the daily range despite closing negative on the session:
I am linking the sectors watchlist in tradingview for your convenience, here
Scans
Up On Volume:
+10% Scan:
9 Million Breakout Scan:
Leading Stocks Analysis
Considering the SPY 0.00%↑ , QQQ 0.00%↑ and IWM 0.00%↑ all closed negative on the session, it was fairly encouraging to see that 14/19 of the stocks listed below closed up on the session.
This is the kind of action you would come to expect from stocks with potential leadership qualities - you want to see continued outperformance in the form of relative strength versus both the general market as well as other individual stocks.
I am linking the potential leaders watchlist in tradingview for your convenience, here
The action in NINE 0.00%↑ continues to stand out - backed by forming part of one of the strongest sectors as of late, we have seen a sustained display of relative strength versus both the overall market as well as other stocks in the same sectors. Now more than +40% from its breakout above the downward trend line and I will be watching closely for future setups due to the raw strength here.
Also liking the weekly base in FOUR 0.00%↑ and keeping on close watch to assess whether this may be setting up to be an IPO U-turn after moving more than +90% off its lows.
Focus List
It is extremely important to remember that nothing listed here is financial advice - I cannot overstate the importance of making each trade your own and adjusting each setup to your own personal strategy and psychology!
Downward Trend Line Setups
ORIC 0.00%↑ - My main focus after moving +105% in 2 days and now consolidating nicely. Would welcome some further tightening as ranges are still wide but the inside day on Friday may make this actionable through that high around 5.93.
RXDX 0.00%↑ - Getting really nice and tight right up here with another inside day on Friday following the +165% gap-up.
HALO 0.00%↑ - Some big relative strength as of late, now finding support at the 20EMA and seeing how it handles the DTL right above.
AMLX 0.00%↑ - Around +140% from the early September low and an inside day with strong DCR on Friday. A recent push through the key moving averages and higher lows since Mid-December has me keeping this on close on watch to see how it handles the DTL.
SMCI 0.00%↑ - +90% From mid-October to late-November and now finding support at the 50-Day moving average for the first time. A potential leader with strong fundamentals and so watching very closely.
ATAT 0.00%↑ - Young IPO with a +70% move off the lows, now consolidating nicely with an inside day and strong DCR after finding support at the 20EMA.
TH 0.00%↑ - Had a +60% move off the November lows and now liking how the moving averages are trending up along with price.
TITN 0.00%↑ - Liking the action following a +26% PEG as it now consolidates above the 20EMA with some tightness. Would prefer if it was not so thin.
BOX 0.00%↑ - Not as fast moving of a stock as I would like but the recent strength may be warranting some attention.
Base and Break
PRTA 0.00%↑ - Forming a nice long base since the +87% gap-up with some constructive higher-lows along the way.
PHVS 0.00%↑ - Massive +356% move followed by a well-structured consolidation and now watching to see if it can move out of this cup-like structure.
I am linking the focus list as well as watch list mentioned below in tradingview for your convenience, here