Trading Plan: 17 March 2023
Nasdaq (+2.48%) made an impressive move yesterday with a little bit more than average volumes. The wide range bar that ignited from EMA21/SMA50/SMA200 might signal a good momentum, but do not forget the economical situation is not a good path at least yet (inflation, banks issues, rates, etc.). Looking for continuation while keeping an eye on the main averages level.
For novice traders, I suggest using a Guppy chart for Nasdaq - in this case, the trend is not in place (we want to see all the red lines above all the blue lines) since the averages are mixed and the assessment might be labeled as YELLOW = caution.
(RED = difficult to trade, GREEN = good conditions for trading).
SP-500 (+1.76%) contained good momentum after the previous day’s bottoming tail and closed above the SMA200. The volumes were good and we might expect new highs during the following days. A new close above the EMA21 and SMA50 will be constructive but watch recent lows as well.
Guppy SP-500: RED (all red lines are below the blue lines, so the assessment level is RED = difficult to trade).
In the news
FBP 0.00%↑ Big banks inject $30 billion to rescue First Republic, but worst not over yet.
CS 0.00%↑ Credit Suisse to borrow up to $54 billion from Switzerland's central bank.
BIDU 0.00%↑ Baidu says it can now operate robotaxis in Beijing with no human staff inside.
MSFT 0.00%↑ Introducing Microsoft Dynamics 365 Copilot, the world’s first copilot in both CRM and ERP, that brings next-generation AI to every line of business.
Conformer-1 is a state-of-the-art speech recognition model trained on 650K hours of audio data that achieves almost human-level performance and robustness across a variety of data.
AMZN 0.00%↑: Project Kuiper is an initiative to increase global broadband access through a constellation of 3,236 satellites in low Earth orbit (LEO).
Sectors
Best yesterday sector: Communication Services, then Technology. Worst sector: Real Estate.
Best weekly sector: Communication Services, then Technology. Worst sector: Energy.
Best monthly sector: Communication Services, then Technology. Worst sector: Energy.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 41.92. The number is still low, we will monitor the new number later today or Monday)
VIX (neutral under 20): 22.99 (declining, a good sign, but it will be better to see the number below 20).
Put / Call Ratio (neutral between 0.7 and 1): 0.98. The number is in the normal range.
CNN Fear & Greed: 28 (Fear). Even if the market was advancing during the last few days, the total environment is not the best one.
Breadth
Stocks above SMA40 (neutral between 30 and 80): 21.57%. This recent decline sent this indicator to its lows and we might expect a reversal. But take into consideration that a level below 30 is not a healthy sign.
Stocks above SMA200 (neutral above 30): 41.02%. The number is still in the GREEN territory and it will be good to see it trending up.
Cumulative 4-Week Hi-Low & Volume Index stabilized yesterday and I will watch closely for a reversal. Basically, I want to see new highs and new volumes entering the market.
Nasdaq Advance / Decline Line: it will be constructive to remain above the recent lows level.
Number of stocks that increased yesterday by more than 4%: 260
Number of stocks that decreased yesterday by more than 4%: 121
McClellan Oscillator (neutral between -100 and 100): -92.44. The number is close to the Oversold area and we might see a pause/reversal in the market (in Bear markets what is Oversold can become more Oversold!).
Earnings Reports
Noteworthy earnings reports for today
(These are the stocks to watch for a possible earnings gap).
What to trade today
Market had a good momentum recently and until now, the way FED treated the banks’ issues was interpreted as positive by traders and investors. Even if we can not talk by a end of QT and behind of a QE, the FED balance sheet looks promising, this is what we all want to see in the market: more money coming in.
As a result, AI, Semi, or Internet-related stocks popped up once the pressure was off.
For today I will watch:
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.
In order to learn more about trading, you may want to read: