Trading Plan: 10 March 2022
Nasdaq gapped up (+3.60%) with above-average volumes but not higher than the day before. Some growth / Technology stocks rebounded nicely yesterday and helped the index move higher as well. The price is still under the main averages. Watching the marked levels: 13850 and 12700. To talk about a constructive base, the 12700 level must hold.
SP-500 closed higher with important volumes, but it is difficult to find the trend as many rotations are taking place. Is this a double bottom pattern?! Watch the higher low level from Tuesday (4158) and the recent high (4417). Anyway, a close above the EMA21 will be a good starting point.
In the news
Oil drops 12% for the worst day since November as wild ride triggered by Russia disruption continues.
Amazon announces a 20-for-1 stock split and $10 billion buyback.
White House issues executive order on regulating cryptocurrencies.
NFTs entered mainstream consciousness in a big way, with celebrities and major companies increasingly warming to the market.
Sectors
Best yesterday sector: Technology, then Communication Services. Worst sector: Energy.
Best weekly sector: Utilities, then Energy. Worst sector: Consumer Cyclical.
Best monthly sector: Basic Materials, then Energy. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 42.58
VIX (neutral under 20): 32.45
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.14
CNN Fear & Greed: 17 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 36.87%
Stocks above SMA200 (neutral above 30): 30.67%
Number of stocks that increased yesterday by more than 4%: 693
Number of stocks that decreased yesterday by more than 4%: 58
Earnings Reports
CrowdStrike soared 12.5% in extended trading after beating on the top and bottom lines, and raising guidance. Revenue grew 63% YoY. Asana plunged 18% as its losses more than doubled.
Noteworthy earnings reports for today:
Oracle ($ORCL) stock hit a record high of $103.65 in mid-December after the enterprise software provider reported top-and bottom-line beats in its fiscal second quarter. Consensus estimates are for earnings of $1.18 per share (+1.7% YoY) and revenue of $10.5 billion (+4.0% YoY).
Rivian Automotive ($RIVN) had a red-hot start after its November initial public offering (IPO), but the electric-vehicle maker quickly stalled out. Wall Street pros are projecting $60.03 million. For reference, RIVN posted a per-share loss of $12.21 on $1 million in sales in its third quarter.
What to trade today
Hard to say if yesterday's price action was a reversal or just a relief rally. All these big candles (both red and green) on the daily chart are not good for finding low-risk entries.
If trading, please consider using small positions and at tighter Stop Loss.
Tesla ($TSLA) tried a few times to pass the upper channel line. If succeeded, the trade might work. Stop Loss: 3-4%.
Sunrun ($RUN) has a wide range bar igniting from the SMA50 and yesterday a constructive retracement. If volumes come in and the price reaches again yesterday high, the trade might work. Stop Loss at yesterday 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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