Daily Plan: Market Review & Focus List (2/28)
Poor DCRs All Around - 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 market initially showed a strong push upwards from the open, however, weakness persisted later into the session at key areas such as previous resistance and short-term moving averages on the QQQ 0.00%↑, the 296 area I have been mentioning continues to be important here:
No point beating around the bush, this kind of environment is far from ideal and it is important to see it that way in order to avoid large drawdowns. The key to super performance trading is avoiding large drawdowns in equity - practising proper risk management techniques is a MUST in this environment. The importance of progressive exposure cannot be overstated - If you enter any given trade with large position sizes right off the bat without any prior successful trades financing additional risk, you are setting yourself up for failure - that is not the way to trade successfully.
It is imperative that you come to terms with the fact that you do not need to trade every little move in the market, you simply cannot make money all the time and you should not always be trading. Great traders know when to sit out and have the discipline to sit on their hands when the market is not providing good enough opportunities - this is backed by confidence in one’s system to understand that when the tide does eventually turn, new opportunities will more than make up for any missed trades.
SPY 0.00%↑ Now closing below the 50 daily moving average:
IWM 0.00%↑ - Similar to the QQQ 0.00%↑ - Rejection at KMAs and prior resistance:
ARKK 0.00%↑ Stronger than all above but also finding resistance at KMAs:
Several stocks which up until this point were looking to be promising setups started struggling with prior areas of resistance and eventually squatted their breakouts. This sort of action is a red flag in the market - it forms part of the valuable feedback that we continue to receive on a daily basis as the market is clearly telling us to exercise patience right now. Rather than pushing the gas pedal and really going for it, it would be more ideal to protect both our mental and financial capital for better opportunities.
Action today was not very encouraging as several promising setups which pushed out early ended up squatting their breakouts and closing poorly:
MARA 0.00%↑ AI 0.00%↑ AEHR 0.00%↑
Leading Stocks Analysis
I am linking the leaders watchlist in tradingview for your convenience, here
A number of leading stocks ended up reversing to close the session with poor daily closing ranges, we are still very much in a news driven and highly volatile market which is once again emphasizing the need of patience for a better trading environment.
Large % of cash continues to be the game plan until my own trades show me that the market is deserving of more capital and thus more trades with larger position sizes.
ATAT 0.00%↑ With some nice action on the session after highlighting this setup on yesterday's focus list. Pushed above its descending trend line (DTL) and simultaneously reclaim short-term moving averages:
AEHR 0.00%↑ Another from yesterday's focus list - Pushed above this pivot and was initially very strong, being up +8% at one point in the session. Went on to have a mediocre close as it gave up a large portion of its gains into the close:
ACLS 0.00%↑ Continues to act well as it made new 52-Week highs after trying to push out of this short-term consolidation. Now watching for any potential basing above the 20EMA.
Sector Analysis
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