Trading Plan: 18 March 2022
Nasdaq (+1.33%) continued its rally with average volumes. The price is maintained above the EMA 21 and it seems it wants to cross the SMA50 and go even farther. 13850 is still a resistance and needs to be watched. We are not out of the woods yet, another correction is very likely also. 12000 area needs to be watched too.
SP-500 contained higher as well. The market anticipated correctly the FED decision impact and now the SP-500 tries to conquer the resistance at ~4420. The triple bottom pattern is bullish and a close above the mentioned level might signal another advance. But… the volumes are still average. For a solid reversal, institutional money must enter the market.
In the news
Amazon completed its $8.45 billion acquisition of MGM.
Maserati is the latest luxury car company to go electric.
House passes bill to end normal trade relations with Russia and Belarus.
The US sets the stage for a contentious Biden call with China’s Xi.
Sectors
Best yesterday sector: Energy, then Basic Materials. Worst sector: Utilities.
Best weekly sector: Financial, then Consumer Cyclical. Worst sector: Energy.
Best monthly sector: Utilities, then Energy. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 46.68
VIX (neutral under 20): 25.67
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.91
CNN Fear & Greed: 26 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 51.37%
Stocks above SMA200 (neutral above 30): 35.15%
Number of stocks that increased yesterday by more than 4%: 437
Number of stocks that decreased yesterday by more than 4%: 29
Earnings Reports
FedEx flopped 3% in extended trading after reporting lower-than-expected quarterly earnings. GameStop stumbled 7.5% after hours following a surprise loss as it endured high expenses from supply limitations.
Noteworthy earnings reports for today:
What to trade today
Even if all the main indexes closed higher for the third straight day, the rotation of the sectors gives some concerns.
Good trades on yesterday ($TSLA, $BILL). Tightening the Stop Loss at breakeven is a good idea.
Deere & Co ($DE) made a big base and is trying to advance. The GLB (green line breakout) might be a good entry. Stop Loss: 5%.
Mercadolibre ($MELI) might cross the resistance and pass the black line. Stop Loss: 5%.
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.