Trading Plan: 11 January 2022
Nasdaq 100 gapped down and continued its downtrend during the morning but succeeded to close above the previous close in the evening. As always, be prepared for all possibilities. Even if the volumes from the second part of the day might suggest a reversal, we are not out of the woods yet and we can see also a downtrend or a consolidation as these levels.
SP-500 made a bottoming tail and respected the channel line (please note that channel line is not a real support) and come back closer to its SMA50.
Most likely, Federal Reserve will raise interest rates in the next few months, but is this already discounted or not? We will see.
When looking at the stocks and especially to the most hit ones in the Technology Sector, we see that some of them made big bottoming tails or even green engulfing candles ($ZS, $HUBS, $FTNT, $NET, $TEAM, $S, $CRWD, $DDOG, $RBLX, $BILL, etc). Both situations are bullish and may suggest a reversal. Will this be their bottom? We never know, time will tell. You will hear often here, we act based on what market is doing and not on what we think or worried it might do.
Sectors
Best yesterday sector: Healthcare, then Technology. Worst sector: Industrials.
Best weekly sector: Energy, then Financial. Worst sector: Technology.
Best monthly sector: Energy, then Communication Services. Worst sector: Technology.
Sentiment
NAAIM (neutral between 70 and 90): 89.54
VIX (neutral under 20): 19.4
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.00
CNN Fear & Greed: 49(Neutral)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 41.11%
Stocks above SMA200 (neutral above 30): 40.63
Number of stocks that increased yesterday with more than 4%: 176
Number of stocks that decreased yesterday with more than 4%: 295
Noteworthy Earnings Reports for today
TD Synnex $SNX earnings estimate: $2.69 per share
What to trade today
Vertex ($VRTX) from the Healthcare Sector. I like the consolidation in the upper part of the last month advance. Just note this is a biotech, volatility might be higher. You may entry with an 1/2 usual position above the black line with Stop Loss at EMA21.
Lucid Motors ($LCID) showed good relative strength during last month and it seems it is prepared for a breakout. Entry above the yesterday low and Stop Loss at EMA21.
HP ($HPQ) held very well and trend is in place (EMA21>SMA50>SMA200). A possible entry is above the black line with Stop Loss at the yesterday low.
Please do your own due diligence if or when placing a trade. All ideas stated here are my own action plan and do not represent trading or investment advice.