Daily Plan: Market Review & Focus List (2/3)
Shakeouts + Strong Closes may give some fuel - Market Overview, Sector & Leading Stock Analysis + 3 Helpful Scans
Hi all! 👋
In this article I will cover:
General Market Overview
The action displayed by leading stocks with TML potential
Sector Analysis - Which groups are breaking down vs showing relative strength
3 Helpful Scans
Links to TradingView watchlists
Stocks currently on my focus list with actionable trade ideas
General Market Overview
The overall market puts in a big shakeout today after gapping down to break yesterday’s lows. A nice bounce off the 200MA in the SPY 0.00%↑ as support came in led to strong closes all over with a simultaneous reclaim of the 50MA.
As traders it is imperative that we have no bias - you must be able to change your opinion with the flick of a switch based on the data and facts the market is presenting you.
No room for opinions or personal thoughts, you must focus merely on the facts.
We are still clearly in a news driven and volatile market as the TSLA 0.00%↑ investors day had a big impact on the overall market, and an even bigger one on related stocks - specifically those related to silicon carbide (AEHR 0.00%↑ ON 0.00%↑) the market interpreted how changes in Tesla’s overall business plans may result in decreased revenue in this sector - hence, large gap downs taking place all over at the open:
What is very interesting and encouraging is how these gap downs found support at key areas - AEHR 0.00%↑ at the previous high volume close from last earnings, ON 0.00%↑ at the previous pivot and 50 day moving average. One thing is certain - you should be in NO RUSH to get involved here, if you are interested, let things calm down and offer tight pivots where you can manage risk effectively.
SPY 0.00%↑ Support at the 200MA + Reclaim of 50MA
QQQ 0.00%↑ Pushes above last session's highs and now has short-term moving averages and key resistance up above
IWM 0.00%↑ Encouraging reversal off the open and now has short-term moving averages and key resistance up above
ARKK 0.00%↑ Recovered from down over -2% to close positive on the session with a great DCR - encouraging.
Really want to stress the importance of not getting too heavy in either direction without making progress to finance taking on additional risk - failure to do so is how large drops in one’s equity curve occurs - to be successful you SIMPLY MUST THINK RISK FIRST. Progressive exposure in a MUST.
Leading Stocks Analysis
I am linking the leaders watchlist in tradingview for your convenience, here
While the market environment is still very uncertain and volatile, it has had every reason to breakdown even lower lately and has simply managed to continue shrugging off weakness and distribution to close strongly.
In no way am I saying this is the all clear, but I will be personally focusing on the long side if today’s lows hold. Along with this, I have come across the most actionable setups I have seen in quite some time, and as we know - the leading metric of market health is how leadership quality stocks are acting and setting up, so it is another encouraging sign that such stocks have found support at key areas.
ALGM 0.00%↑ Recovered from an initial gap down to find support at the 20EMA and reverse to close strong on the session. Now offering a potential entry on break of this descending trend line in what has been an RS leader for some time now, this is one to watch moving closely forward.
XM 0.00%↑ Another RS leader since gapping up on earnings and pushing out quickly. Nice overall well-structured consolidation within this base as it has had several strong closes - clearly showing demand is there as it may be getting ready to push out once more.
TSLA 0.00%↑ Gaps down due to its investor's day event-related news - did close pretty well on the session but was capped by the 20EMA - quite simple here, breaking today's low will be discouraging while a quick reclaim of the 20EMA and push above today's high may indicate it still has some power left.
3 More stocks with leadership qualities that managed to shrug off a deep red open and close strongly after finding support at key areas:
Sector Analysis
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