Trading Plan: 29 July 2022
Nasdaq (+1.08%) went higher with good volumes. Price action is strong (yesterday's dip was bought rapidly) and we might see a good advance to the next resistance. All the retracements made since June 16th were constructive since the price always made higher lows.
SP-500 (+1.21%) also closed in green with signs of accumulation. It seems money begin to reenter the market and this might be a good signal to increase exposure. As always, please be open to all scenarios, keep an eye on the recent lows (SMA50 and EMA21 area for now) and be prepared to reduce exposure if the case.
In the news
S&P 500 futures rise after strong Apple, Amazon reports as Wall Street heads for winning week.
U.S. economy shrinks for the second straight quarter, igniting recession fears.
GDP fell 0.9% in the second quarter, the second straight decline and a strong recession signal.
EV reckoning comes to Ford as it cuts 8,000 ICE jobs to focus on electrification.
Mortgage Rates Fall to 5.3%, Continuing Volatile Stretch.
Sectors
Best yesterday sector: Utilities, then Real Estate. Worst sector: Communication Services.
Best weekly sector: Utilities, then Energy. Worst sector: Communication Services.
Best monthly sector: Technology, then Consumer Cyclical. Worst sector: Basic Materials.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 47.21
VIX (neutral under 20): 22.33
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.94
CNN Fear & Greed: 39 (Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 66.91%
Stocks above SMA200 (neutral above 30): 26.96%
Number of stocks that increased yesterday by more than 4%: 560
Number of stocks that decreased yesterday by more than 4%: 163
McClellan Oscillator (neutral between -100 and 100): 167.96
Earnings Reports
Amazon AMZN 0.00%↑ jumps on revenue beat and rosy guidance for the third quarter. Apple AAPL 0.00%↑ beats on revenue and profit, expects growth to accelerate despite ‘pockets of softness’. Pfizer PFE 0.00%↑ quarterly sales surge to record high, driven by Covid vaccine and antiviral treatment Paxlovid. Roku ROKU 0.00%↑ shares were demolished, down 26% after hours. The company missed both earnings and revenue expectations, warning of “an economic environment defined by recessionary fears.”
Noteworthy earnings reports for today:
What to trade today
Good price action yesterday in the market and many nice-looking setups with low-risk entries. Increasing exposure might be a good idea, but if the environment deteriorates, switch to defend the portfolio and tighten Stop Loss.
Oils, Solar, Medical Biotech work nicely now and they are likely to continue grinding higher. Many are far too much from their support, no low-risk entries now, do not chase.
United Therapeutics UTHR 0.00%↑ just made a visit to the means and it stays constructively above the increasing SMA50. A price above the black line might work. Stop Loss: SMA50 / 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.