Trading Plan: 26 July 2022
Nasdaq (-0.43%) continued its retracement below Friday’s low, but with lower volumes than the day before. Buyers came in and sent the price a little bit higher from the daily lows. Still not a bad situation. Watching the Friday’s high and the next residence vs. recent lows.
SP-500 (+0.13%) closed flat with a Doji candle and succeded to stay above the SMA50 and EMA21. The same idea, watching the Friday’s high vs. main averages & the recent lows.
In the news
Germany fears a‘ serious’ situation as Russian gas flows are set to dwindle; Ukraine looks to resume grain exports.
Alibaba pops 6% after announcing plans for a dual primary listing in Hong Kong.
Biden: "We're not going to be in a recession".
Big Tech earnings are about to determine the direction of the market.
Tesla Records $170 Million Impairment Charge on Bitcoin (securities filing show electric-car company also logged $64 million in gains from bitcoin sales).
Sectors
Best yesterday sector: Energy, then Basic Materials. Worst sector: Technology.
Best weekly sector: Industrials, then Energy. Worst sector: Communication Services.
Best monthly sector: Industrials, then Consumer Cyclical Worst sector: Communication Services.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 44.48
VIX (neutral under 20): 23.36
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.01
CNN Fear & Greed: 38 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 55.23%
Stocks above SMA200 (neutral above 30): 21.72%
Number of stocks that increased yesterday by more than 4%: 212
Number of stocks that decreased yesterday by more than 4%: 143
McClellan Oscillator (neutral between -100 and 100): 112.43
Earnings Reports
UBS 0.00%↑ misses expectations; the CEO cites one of the ‘most challenging’ quarters for investors in a decade. Walmart WMT 0.00%↑ cuts profit outlook as inflation forces shoppers to spend more on necessities.
Google: GOOGL 0.00%↑ will report its second-quarter results after Tuesday's close. Analysts, on average, see Alphabet's total revenue growth moderating to just 13.1% YoY to $70.0 billion, while earnings are expected to decline 4.4% to $1.30 per share. Microsoft: analysts, on average, believe MSFT 0.00%↑ will report earnings of $2.30 per share (+6.0% YoY) and revenue of $52.5 billion (+13.7% YoY) for the three-month period.
Other noteworthy earnings reports for today:
What to trade today
The market still stays at a constructive level and some traders probably began to test the waters. Of course, not a time to be aggressive but if the price holds the recent support, being long makes sense with some pilot/test buys.
Anyway, this is not a market for beginners (wait for the trend, it is safer: EMA21>SMA50>SMA200). Take into consideration that the earnings season just started and we may see some volatility. Also, Federal Reserve is on track for another 75bp hike tomorrow (as expected - a different rate might imply higher volatility).
I was watching Torm TRMD 0.00%↑ but it already gapped up in the premarket, no chasing.
Amgen AMGN 0.00%↑ is consolidating and a price above the black line might work. Stop Loss: EMA21 / SMA50.
Monster Beverage MNST 0.00%↑ returned to its mean where it might find support. A price above yesterday’s high might work. Stop Loss: yesterday’s low.
Texas Pacific Land TPL 0.00%↑ made a big base and made a GLB (green line breakout). It still can be bought above yesterday’s high. Stop Loss: Friday’s low.
Also, waiting for a better pattern for VRTX 0.00%↑ and MRNA 0.00%↑.
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.