Trading Plan: 1 June 2022
Nasdaq (-0.41%) had a small retracement and succeeded to stay above the EMA21. Generally, the constructive retracements had smaller volumes, but yesterday was a distribution day! Watching yesterday's high and waiting for important volumes to establish a strong trend. Also, keep an eye on the EMA21, a key point now.
SP-500 (-0.63%) had also a red day. Since volumes were above the average, the index needs to close above yesterday's high with strong volumes if it wants to begin to continue the uptrend from here. If it loses the EMA21, we might see lower prices.
In the news
Apple's new iPhone and iPad software will reportedly add lots of big changes.
Consumer confidence dips on worries over inflation and the slowing U.S. economy.
Investor hopes for either a rate ‘pause’ or a 25-basis-point hike in September.
EU Sets Harshest Russian Sanctions, Targeting Oil and Insurance.
Sectors
Best yesterday sector: Consumer Cyclical, then Communication Services. Worst sector: Basic Materials.
Best weekly sector: Consumer Cyclical, then Technology. Worst sector: Healthcare.
Best monthly sector: Energy, then Utilities. Worst sector: Consumer Defensive.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 33.19
VIX (neutral under 20): 26.19
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.96
CNN Fear & Greed: 25 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 39.58%
Stocks above SMA200 (neutral above 30): 27.77%
Number of stocks that increased yesterday by more than 4%: 295
Number of stocks that decreased yesterday by more than 4%: 334
McClellan Oscillator (neutral between -100 and 100): 119.24
Earnings Reports
Salesforce stock jumps as it raises profit forecast, CFO says the company will be more ‘measured’ in hiring. Victoria’s Secret reports better-than-expected profit but warns challenges could persist.
GameStop ($GME) has been in focus recently as shares of video game retailers have been volatile. Consensus estimates are for GameStop to report a per-share loss of $1.45 – much wider than the 45 cents per-share loss it recorded in the year-ago period. Revenue, meanwhile, is expected to be up a modest 3.1% year-over-year (YoY) to $1.3 billion.
Other noteworthy earnings reports for today:
What to trade today
The market (Nasdaq / SP-500) is in a very unbalanced situation: a price over yesterday’s high OR a price below the EMA21 might signal a direction for the short term.
Many stocks had a retracement yesterday, not bad, still in the game. The bull flag is still intact. The same idea: a price over the last two days high OR losing the recent lows, might indicate how things develop.
Celsius ($CELH) is advancing very strongly and now we might get a second entry after the $63 pivot. The trade might work above the black line with Stop Loss at SMA200.
Hubspot ($HUBS): good volumes yesterday, we might see a breakout over the black line. Stop Loss: yesterday’s low.
Do your due diligence if or when placing a trade. All ideas stated here are my own and do not represent trading or investment advice.
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