Trading Plan: 2 June 2022
Nasdaq (-0.72%) had another red day and remained above the EMA21. This is not a confirmation per se, but a breakdown from this area might send the price back to the lows. Besides the key averages and the support at 11.000, watch yesterday’s high and Friday’s low for clues.
SP-500 (-0.75%) closed lower with below-average volumes. This seems to be a consolidation area before setting up a direction. Watching yesterday’s both high and low for now.
In the news
Oil prices slide after report Saudi Arabia could step up if Russian output dips under sanctions.
Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by the Fed and Ukraine war.
Binance raises $500 million fund to invest in ‘Web3’ as crypto slides into bear market.
Solana suffered its second outage in a month, sending the price plunging.
Elon Musk tells Tesla workers to return to the office full time or resign.
Sectors
Best yesterday sector: Energy, then Utilities. Worst sector: Consumer Defensive.
Best weekly sector: Consumer Cyclical, then Technology. Worst sector: Healthcare.
Best monthly sector: Energy, then Utilities. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 33.19
VIX (neutral under 20): 25.69
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.05
CNN Fear & Greed: 26 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 38.23%
Stocks above SMA200 (neutral above 30): 26.97%
Number of stocks that increased yesterday by more than 4%: 172
Number of stocks that decreased yesterday by more than 4%: 210
McClellan Oscillator (neutral between -100 and 100): 82.10
Earnings Reports
GameStop reports a $158 million loss and decline in hardware sales. GameStop has said it plans to launch a non-fungible token (NFT) marketplace by the end of the second quarter.
Lululemon Athletica ($LULU) has had a rough go of it on the charts recently, with shares down about 28% from their late-April peak above $400. Wall Street's pros, for their part, have consensus estimates for earnings of $1.43 per share (+23.3% YoY) and revenue of $1.53 billion (+27.5% YoY).
Other noteworthy earnings reports for today:
What to trade today
The main indexes formed a channel during the last days and it is better to wait for a break for a direction. Besides Energy, many stocks are being hit.
There are a lot of bull flags formed after the reversed rally. A price above the highs might work if the market is positive. But, I will rather wait for a confirmation of money entering into the market.
I will watch: $AMD, $HUBS, $OLN.
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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