Trading Plan: 24 February 2022
Nasdaq (-2.57%) stopped on support at 13,000 as mentioned in the previous plans. Heavily influenced by the war news, its action might continue its plunge to lower support (12,400 maybe?!).
SP-500 (-1.84%) made a similar move and stopped at the January low.
In the news
Russia’s military attacks Ukraine from land and sea
The U.S. and Allies Poised to Hit Russia With Broad Sanctions
Oil prices jump 6% as Russia launches attack on Ukraine; Brent hits $100 for the first time since 2014.
Wheat, soybeans hit nine-year highs.
Bitcoin drops 8% and other cryptocurrencies tumble after Russia attacks Ukraine
Sectors
Best yesterday sector: Energy, then Consumer Defensive. Worst sector: Consumer Cyclical.
Best weekly sector: Energy, then Consumer Defensive. Worst sector: Consumer Cyclical.
Best monthly sector: Energy, then Basic Materials. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 53.49
VIX (neutral under 20): 31.02
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.96
CNN Fear & Greed: 27 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 21.39%
Stocks above SMA200 (neutral above 30): 25.79%
Number of stocks that increased yesterday by more than 4%: 156
Number of stocks that decreased yesterday by more than 4%: 496
Earnings Reports
Block ($SQ) had a rough end to 2021, with the stock shedding nearly 33% in the fourth quarter. Losses have only accelerated in 2022, with shares off more than 39% for the year-to-date, trading below the $100 mark for the first time since June 2020. Analysts’ consensus estimate of 23 cents per share (-28.1% YoY). The pros, on average, also anticipate revenue of $4.0 billion in SQ’s fourth quarter, up 28% from the year prior.
Other noteworthy earnings reports for today: $BABA, $AMT, $AXON, $BYND, $CVNA, $COIN, $CUBE, $DELL, $DISCA, $ETSY, $INTU, $MRNA, $NKLA, $NCLH, $OXY, $PZZA, $SEAS, $VALE, $W, $ZS.
What to trade today
Bad news affects the market and indeed, besides the key sectors like Energy or safe haven precious materials, it is unlikely to see something going to the upside. But, never say never, we all know that market is always smarter (sentiment is at the lows, will it go even lower?!).
We had very good picks on the short side this week ($AMBA, $TASK, $PRFT, $APPS, $PATH, $AMZN, $INMD, $LCID, $NET). Please watch them carefully and consider taking partials and let the rest ride risk-free.
Futures are again big red (-2% for S&P Fut) at the time I write the plan. It is very likely stocks open with a big gap this morning. I do not intend to open new positions.
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.