Trading Plan: 12 January 2022
Nasdaq 100 showed a very strong reversal on yesterday and closed the day with 1.47% advance. Combined with Monday volume, it seems the move can confirm an uptrend continuation. But as always, do not make predictions, but scenarios.
SP-500 crossed back the SMA50 (a very good sign) and closed above EMA21 as well. Volumes were average, for a potent reversal I would like to see bigger volumes. We will see, day by day.
Illumina ($ILMN) made a big move (+15.99%) after announcing a new innovative partnerships, along with new groundbreaking technologies at 2022 J.P. Morgan Healthcare Conference.
SaaS / Growth stocks confirmed the Monday’s bottoming tails and engulfing candles and came back strong with strong moves.
FED is about to reduce the bond buying, taper asset purchasing and increase the interest rates. One after another or all at once? Investors expect a confirmation.
“The White House is bracing for another bad report Wednesday on inflation — but now expects it to slow down by the end of the year”.
Sectors
Best yesterday sector: Energy, then Basic Materials. Worst sector: Utilities.
Best weekly sector: Energy, then Financial. Worst sector: Real Estate.
Best monthly sector: Energy, then Financial. Worst sector: Technology.
Sentiment
NAAIM (neutral between 70 and 90): 89.54
VIX (neutral under 20): 18.41
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.76
CNN Fear & Greed: 59(Greed)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 45.89%
Stocks above SMA200 (neutral above 30): 43.06%
Number of stocks that increased yesterday with more than 4%: 360
Number of stocks that decreased yesterday with more than 4%: 48
Noteworthy Earnings Reports for today
Infosys ($INFY) earnings estimate: $0.18 per share
Jefferies Financial Group ($JEF) earnings estimate: $1.26 per share
Shaw Communications ($SJR) earnings estimate: $0.30 per share
What to trade today
Digital Ocean ($DOCN) is a a cloud company (this industry might signaled a bottom) and the stock can bounce the support at $65 area. Still under EMA21, so try a smaller position size. Entry above the yesterday high and Stop Loss under yesterday low.
Stewart Info Services ($STC) shows a nice volatility contraction pattern (VCP). EMA21 acted as support and buyers came in sending the price again at the highs. Entry above the yesterday high and Stop Loss under yesterday low.
Alpha Metallurgical Resources ($AMR) made a cup & handle and it might breakout. Good volumes, declining ATR. Entry above the yesterday high and Stop Loss under yesterday low.
$DVN, $CVX in Oil & Gas from last week still acting very well. All three trades from yesterday triggered and are already on profit, especially $LCID. Also, watching $MRAM and $MU for a low risk entry.
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.