Trading Plan: 27 July 2022
Nasdaq (-1.87%) continued its retracement and succeded to stay above the EMA 21. Still constructive since there were no big volumes. There are two areas to watch: the red square till the recent low as it will not be constructive to violate it and the green square, meaning a come back to the recent high an advance to the support (~12310 area)
SP-500 (-1.15%) also made a red candle and closed below the previous day's low, but succeeded to stay above both EMA21 and SMA50 - which may act as support… or not. Watching the lows vs. the recent high (Friday’s high) and the marked support.
In the news
Twitter says it significantly slowed hiring during the second quarter.
Apple’s earnings will give a peek into the mindset of the high-end consumer.
Intel plans to make chips for Taiwan’s MediaTek to keep up with Asian manufacturing rivals.
EU agrees to curb gas consumption.
Fed to unveil another big rate hike as signs of economic slowdown grow. A 75 bps rate hike is a certainty but 100 bps can't be ruled out.
The Fed will cut rates in 2023, says Bank of America.
Sectors
Best yesterday sector: Utilities, then Healthcare. Worst sector: Consumer Cyclical.
Best weekly sector: Utilities, then Energy. Worst sector: Communication Services.
Best monthly sector: Energy, then Utilities. Worst sector: Communication Services.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 44.48
VIX (neutral under 20): 24.69
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.00
CNN Fear & Greed: 35 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 51.15%
Stocks above SMA200 (neutral above 30): 21.18%
Number of stocks that increased yesterday by more than 4%: 121
Number of stocks that decreased yesterday by more than 4%: 450
McClellan Oscillator (neutral between -100 and 100): 72.14
Earnings Reports
Boeing BA 0.00%↑ results fall short of estimates but the manufacturer still expects to be cash flow positive this year. Enphase ENPH 0.00%↑ sees strong solar growth in Europe as natural gas prices soar. Microsoft MSFT 0.00%↑ misses estimates but the stock is up 5% on rosy guidance. Alphabet GOOGL 0.00%↑ misses on earnings and revenue for the second quarter. Chipotle CMG 0.00%↑ price hikes drive profit growth – and the chain says more increases are coming. Shares of UPS UPS 0.00%↑ fall after the company says higher rates offset lower-than-expected volumes in the second quarter. Coca-Cola’s KO 0.00%↑ earnings top expectations as sales volume recover from the pandemic. Walmart WMT 0.00%↑ shares slump after retailer cuts profit outlook on inflation concerns. UBS UBS 0.00%↑ misses expectations; the CEO cites one of the most challenging quarters for investors in a decade.
Meta Platforms META 0.00%↑ reports its second-quarter earnings after Wednesday's close. Analysts' consensus estimates are for Meta Platforms to report second-quarter earnings of $2.61 per share (-38.3% YoY) and revenue of $29.0 billion (+3.9% YoY).
Other noteworthy earnings reports for today:
What to trade today
Today Federal Reserve will announce the hike value (75bp is expected - a different rate might imply higher volatility). Betting before the news is risky.
Triggered: AMGN 0.00%↑, TPL 0.00%↑, MCK 0.00%↑, HRB 0.00%↑.
Still watching: VRTX 0.00%↑, MNST 0.00%↑, MRNA 0.00%↑.
Lantheus LNTH 0.00%↑ is setting up for a breakout while both volumes and ATR are decreasing. A price above the black line might work. 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.