Trading Plan: 22 April 2022
Nasdaq (-2.07%) tried in the morning to pass the EMA21 and SMA50, but fell sharply after Fed Chairman Jerome Powell said the central bank is committed to raising rates “expeditiously” to bring down inflation. This new distribution day might suggest a downtrend continuation.
SP-500 (-1.48%) closed also in red with high volume. Breaking the short-term support at ~4370 might suggest lower prices. But not making forecasts, just observing the market. All scenarios are possible. As always.
In the news
Powell says taming inflation is‘ absolutely essential,’ and a 50 basis point hike is possible for May.
Many factory workers in Shanghai can’t get back to work, even after Covid controls ease.
Warner Bros. Discovery is shutting down CNN+.
Musk to explore a potential tender offer for Twitter has $46.5B in committed financing for the deal.
Sectors
Best yesterday sector: Consumer Defensive, then Real Estate. Worst sector: Basic Materials.
Best weekly sector: Real Estate, then Consumer Defensive. Worst sector: Communication Services.
Best monthly sector: Consumer Defensive, then Utilities. Worst sector: Communication Services.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 74.05
VIX (neutral under 20): 22.68
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.11
CNN Fear & Greed: 39 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 50.44%
Stocks above SMA200 (neutral above 30): 37.01%
Number of stocks that increased yesterday by more than 4%: 86
Number of stocks that decreased yesterday by more than 4%: 818
McClellan Oscillator (neutral between -100 and 100): -13.37
Earnings Reports
AT&T ascended 4% to 13-week highs despite falling short of earnings and sales expectations. $T experienced its strongest first quarter in more than a decade for postpaid phone net additions while fiber broadband net additions remained strong. American Airlines rose 4% on Thursday after expecting a pretax profit for the second quarter, as robust reservations helped to offset rising fuel costs. The company’s sales topped 2019 levels for the first time since the covid epidemic.
Noteworthy earnings reports for today:
What to trade today
Do not fight the FED. Fear is present in the market and we might see new lows. Many longs patterns are now broken, they need time to recover.
When the market reversed during the day, I tweeted a short idea that was triggered a few hours later:
Monday ($MNDY) might also break the support. If so, a Stop Loss at 5% might work.
Twilio ($TWLO) is testing again the support. A price lower below the black line might trigger a short trade. 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.
In order to learn more about trading, you may want to read:
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