Trading Plan: 28 January 2022
Nasdaq closed lower (-1.4%) with average volumes, but the index remains under pressure as net lows continued their trend. Being below SMA200 and since there are no signs of a trend confirmation, the best thing to do is wait.
SP-500 (-0.54%) also went south with higher than average volumes. It seems it is forming a small base and setting up a bear flag. Will the price test again the lows?! Your bet is as good as mine.
$AAPL ascended 3.3% after hours, smashing earnings estimates in Q4. Apple’s revenue spiked 11% to $123.9 billion, setting a new record high. EPS: $2.10 (vs. $1.89 expected) while Revenue: $123.9 billion (vs. $118.66 billion expected).
The Fed announced yesterday that interest rates are going up, and now the stock market’s going down… but why? “What the market doesn’t like, is rapid changes in the monetary landscape”.
Elon Musk says it’s more important for Tesla to make a robot than new car models this year. “Robot Optimus is intended to be friendly, of course, and navigate through a world of humans, and eliminate dangerous, repetitive, and boring tasks”.
Many growth stocks showed relative strength today, the downside appears to be fairly limited here. Or not?! Until the market stabilizes, I just observe.
Sectors
Best yesterday sector: Energy, then Utilities. Worst sector: Consumer Cyclical.
Best weekly sector: Energy, then Consumer Defensive. Worst sector: Consumer Cyclical.
Best monthly sector: Energy, then Financial. Worst sector: Technology.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 53.39
VIX (neutral under 20): 30.49
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.06
CNN Fear & Greed: 33 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 17.88%
Stocks above SMA200 (neutral above 30): 23.78%
Number of stocks that increased yesterday by more than 4%: 128
Number of stocks that decreased yesterday by more than 4%: 537
Noteworthy Earnings Reports / Events for today
Chevron ($CVX) has benefited from surging energy prices — a message that’s been made abundantly clear in the oil major’s surging share price. CVX stock is up almost 34% in the last 12 months to trade at levels not seen since early 2018. The pros, on average, expect earnings per share of $3.13 per share, compared to a per-share loss of 1 cent in the year-ago period, and revenues of $45.6 billion (+80.7% YoY).
Other earnings reports:
What to trade today
Oils are still in the long game together with most of the shorts taken. Looking at the market, the indexes are likely to continue their downtrend.
Alibaba ($BABA) is well-positioned for a short. The pressure is still on and an entry below the black line might work. Stop Loss at $115 or max. 7%.
I do not see other good setups. It might be early to try for growth stocks even if some of them showed good RS, the market is weak and there are many chances for a failed advance. And many shorts are far from their bases.
If still want to trade, please consider using a lower size position and a tighter stop.
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.