Trading Plan: 2 February 2022
Another positive day for the market - Nasdaq gained 0.75% and closed under the EMA21. Yesterday was the first day with net highs higher than the net lows (47 net highs vs. 31 net lows).
SP-500 advanced by 0.69% and succeeded to close just above the EMA21. Energy was the standout sector, surging 3.56% to seven-year highs. Materials marched 1.54% while industrials and financials both increased 1.38%.
Even if the market showed us an uptrend, a pullback is highly possible. But of course, you have to position the portfolio based on what the market is doing, not on what you think (or are worried) it might do. Just to be ready for all the scenarios.
Alphabet reported after the bell and topped earnings and revenue expectations. Earnings per share: $30.69 adjusted (analysts expected $27.34) and Revenue: $75.3 billion, +32% YoY (analysts expected $72.1 billion). Google stock will make a split in July, 20-for-1.
Advanced Micro Devices surged more than 11% after-hours when posting stellar sales guidance: full-year revenue grew 68% to a record $16.4 billion. Earnings: $0.92 (vs. $0.76 expected) and Revenue: $4.83 billion (vs. $4.53 billion expected).
PayPal reported mixed Q4 2021 earnings Tuesday and provided guidance for the next quarter that fell short of analyst estimates.
Sales of real estate in the metaverse topped $500 million last year and could double this year, according to investors and analytics firms.
Sectors
Best yesterday sector: Energy, then Basic Materials. Worst sector: Utilities.
Best weekly sector: Communication Services, then Technology. Worst sector: Real Estate.
Best monthly sector: Energy, then Financial. Worst sector: Technology.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 53.39
VIX (neutral under 20): 21.96
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.95
CNN Fear & Greed: 34 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 31.96%
Stocks above SMA200 (neutral above 30): 30.28%
Number of stocks that increased yesterday by more than 4%: 484
Number of stocks that decreased yesterday by more than 4%: 65
Noteworthy Earnings Reports / Events for today
What to trade today
All the advised trades are green, beautiful results for: $BROS, $DDOG, $CRWD, $HOOD, $MA, $ZS, $S, $PRFT and $CVX.
I am watching them closely and already adjusted the Stop Loss.
Splunk ($SPLK) might be very close for a breakout above the black line. Good volumes and EMA21/SMA50 cross. Stop Loss: EMA21.
Monday has exceptional financial results and was hit hard during this correction. Now, it looks the price wants to move back to the highs. Entry above the black line and Stop Loss at yesterday low (a very tight one as I do not want to risk more now).
Atlassian ($TEAM) formed a triple bottom and made a small consolidation during the last days, it can be bought above the black line with Stop Loss at $308.
Everspin Technologies ($MRAM) back to its resistance area. Very good accumulation on the November breakout, good price action during the consolidation and correction time. I will buy above the black line with 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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