Trading Plan: 25 May 2022
Nasdaq (-2.35%) gapped down but is still in the area. It seems to consolidate here, but the most important thing is the direction: above 12000 or under 11000?! This third time testing the lows might signal good support. Do not forecast, just observe the price action at the mentioned levels.
SP-500 (-0.81%) also closed in red and made a higher low. It is possible to see the price going towards the EMA21, but watch the reaction: will it bounce back as per history (see the noted circles) or will it break it and reverse the trend?!
In the news
Tech Stocks Continue to Fall After Snap’s Profit Warning.
No recession ahead: Evercore ISI predicts S&P 500 will jump 22% from current levels.
Stellantis, Samsung SDI Plan New EV Battery Plant in Indiana.
Walmart Expanding Drone Delivery Network to Six States.
Millennials drive remote work push.
Sectors
Best yesterday sector: Utilities, then Consumer Defensive. Worst sector: Communication Services.
Best weekly sector: Utilities, then Energy. Worst sector: Consumer Cyclical.
Best monthly sector: Energy, then Utilities. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 19.51
VIX (neutral under 20): 29.45
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.01
CNN Fear & Greed: 13 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 18.60%
Stocks above SMA200 (neutral above 30): 22.59%
Number of stocks that increased yesterday by more than 4%: 113
Number of stocks that decreased yesterday by more than 4%: 582
McClellan Oscillator (neutral between -100 and 100): 17.73
Earnings Reports
Nordstrom raises full-year outlook as first-quarter sales top expectations. Abercrombie & Fitch shares fall 29% after retailer posts loss, offers weak outlook. Best Buy says softer demand is sticking around, but the company isn’t planning for a recession.
Nvidia ($NVDA) has a strong history of beating Wall Street's estimates on both the top and bottom line. Nvidia is expecting to report earnings of $1.30 per share and revenue of $8.1 billion in its first quarter. This compares to consensus estimates for earnings per share of $1.29 (+41.6% YoY) and revenue of $8.1 billion (+43.4% YoY).
Other noteworthy earnings reports for today:
What to trade today
The market is in the same area, no need to predict the next leg, just observe.
No plan to trade for today, just watching: $LNTH, $APA, $EGLE, $OXY.
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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