Trading Plan: 28 July 2022
Nasdaq (+4.06%) gapped up probably in anticipation of an expected 75bp rate hike. It continued higher with higher volumes than the day before, but still below average. The price is still between the red and green zone, watching for a direction.
SP-500 (+2.62%) made a wide range bar ignited from the EMA21/SMA zone with above-average volumes. The price action seems constructive and we might see the price advancing more towards the resistance at 4180. But, as always, keep an eye open for all scenarios including the recent lows.
In the news
Fed Raises Rates by 0.75 Point, Signals Further Increases.
Energy Prices in Europe Surge After Russia Slashes Gas Flows.
Senate Approves $280 Billion Bill to Boost U.S. Chip Making, Technology.
Cathie Wood's Ark Invest Offloads Over 1.4M Coinbase Shares as COIN Price Falls.
Sectors
Best yesterday sector: Communication Services, then Technology. Worst sector: Utilities.
Best weekly sector: Utilities, then Energy. Worst sector: Communication Services.
Best monthly sector: Technology, then Industrials. Worst sector: Basic Materials.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 44.48
VIX (neutral under 20): 23.24
Equity Put / Call Ratio (neutral between 0.7 and 1): 1.05
CNN Fear & Greed: 38 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 61.79%
Stocks above SMA200 (neutral above 30): 23.54%
Number of stocks that increased yesterday by more than 4%: 699
Number of stocks that decreased yesterday by more than 4%: 69
McClellan Oscillator (neutral between -100 and 100): 134.19
Earnings Reports
Meta META 0.00%↑ reports earnings, revenue miss and forecasts second straight quarter of declining sales. Ford F 0.00%↑ beats expectations and raises dividends as the company sells more of its top models. Qualcomm QCOM 0.00%↑ sales rise 37% despite challenging macroeconomic environment. Etsy Shares ETSY 0.00%↑ surge on better-than-expected results.
Amazon AMZN 0.00%↑ will release its second-quarter earnings report after Thursday's close. Consensus estimates are for AMZN to unveil earnings of 15 cents per share (-80% YoY) and revenue of $119.1 billion, up 3.4% over the year-ago period. Research analyst Angelo Zino expects Apple AAPL 0.00%↑ to report gross margins between 42% and 43% when it unveils its fiscal third-quarter results after the July 28 close. Overall, analysts, on average, expect AAPL to report EPS of $1.16 (-10.8% YoY), and revenue of $82.6 billion (+1.5% YoY).
Other noteworthy earnings reports for today:
What to trade today
The market received the FED news with optimism and all the sectors closed in green. There are stocks with good action and it seems the market is prepared for a positive turn (anyway, do not enter all in, progressive exposure is the key). Just to have an idea, I am ~20% invested, 5 positions, all green as per yesterday’s close.
Besides the already mention stock on yesterday's Trading Plan, I will watch:
Eli Lilly LLY 0.00%↑ is tightening more and more just above the EMA21. Low volumes. Declining ATR. A price above the black line might trigger a potential move higher. Stop Loss: ~EMA21.
Evolent Health EVH 0.00%↑ builds higher lows. A diagonal breakout might happen, Stop Loss: yesterday’s low.
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.