Trading Plan: 25 July 2022
Nasdaq (-1.87%) made a retracement on Friday after the last advance. It is not bad, it even may be normal… if Friday’s low is not violated. The scenario presented on the 15th of July became a reality and the price sits comfortably above the EMA21 and SMA50. Good bars of accumulation on Tuesday and Wednesday. Watching Friday’s high and 12320 level and Friday’s low for now. Keep an eye on the mentioned key averages and recent lows.
SP-500 (-0.93%) had a similar move and stays well above the EMA21 and SMA50. The pullback with under-average volume is normal after the accumulation days (Tuesday to Thursday). Let’s watch Friday’s low, SMA50/EMA21 and 3818 level as well if the case. The upside also: Friday’s high and the marked level (blue line, 4175 level - there’s a void to the left and if the market is good, we might see that level soon).
In the news
Apple’s new car software could be a trojan horse in the automotive industry.
GM is far behind Tesla in electric vehicle sales. CEO Mary Barra has bet the company that will change.
Amazon to buy primary healthcare provider One Medical for roughly $3.9 billion.
Monkeypox was declared a global emergency by WHO.
There Are Signs Inflation May Have Peaked, but Can It Come Down Fast Enough?
Sectors
Best yesterday sector: Utilities, then Consumer Defensive. Worst sector: Communication Services.
Best weekly sector: Consumer Cyclical, then Industrials. Worst sector: Communication Services.
Best monthly sector: Consumer Cyclical, then Technology. Worst sector: Basic Materials.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 44.48
VIX (neutral under 20): 23.03
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.08
CNN Fear & Greed: 39 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 51.79%
Stocks above SMA200 (neutral above 30): 20.08%
Number of stocks that increased yesterday by more than 4%: 59
Number of stocks that decreased yesterday by more than 4%: 510
McClellan Oscillator (neutral between -100 and 100): 96.90
Earnings Reports
Verizon VZ 0.00%↑ shares fall after company cuts full-year forecast. Snap SNAP 0.00%↑ shares plunged 25% on disappointing second-quarter results and plans to slow hiring. AT&T T 0.00%↑ shares fall after the company says later payments and higher spending are hurting cash flow. Domino’s DPZ 0.00%↑ earnings miss expectations as the pizza chain struggles with the driver shortage and higher costs.
Noteworthy earnings reports for today:
And the rest of the main reports for this week:
What to trade today
The market made a strong move from its lows, but this is not a full green sign. We are not out of the woods yet (we are still under the SMA200, do not forget) and even in the short term, we have the equity put/call ratio at 1.08 and oscillator very close to the overbought side. It doesn't mean exactly something in the red territory, but just to be cautious.
GitLab GTLB 0.00%↑ brings together development, operations and security teams, allowing them to plan, build, secure and deploy software. You may read more about this company here. I like the higher and higher lows, below-average volumes and the diagonal breakout line which let us have a low-risk trade. Stop Loss: 5%.
Mckesson Corp MCK 0.00%↑ stays constructively above the main averages and if the price advance above the black line the trade might work. Stop Loss: EMA21 or SMA50.
H&R Block HRB 0.00%↑ has average volumes, declining ATR and it is one of the few stocks which are in a trend (EMA21>SMA50>SMA200). A price above the black line might work. Stop Loss: $36.60.
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.