Trading Plan: 3 March 2022
Nasdaq (+1.62%) continued its consolidation for the 4th consecutive day. It seems it might want to break out for this flag pattern formed in the last few days. A close above the EMA21 will be a good sign.
SP-500 (+1.86%) also went higher with more than average volume. The pattern looks interesting now and it might pass the declining EMA21 and reach for the SMA200 which will be constructive price action. But also, keep an eye on the 4280 level.
In the news
Russia steps up attacks on key Ukrainian cities in face of fierce resistance.
Wheat futures rampaged 7.62% for the third consecutive gain. The commodity is already up 23% this week.
Russian stocks are becoming “uninvestable”.
Jerome Powell has signaled that the strong economy and elevated inflation make it appropriate to hike rates in two weeks’ time.
Sectors
Best yesterday sector: Basic Materials, then Energy. Worst sector: Communication Services.
Best weekly sector: Energy, then Technology. Worst sector: Financial.
Best monthly sector: Energy, then Basic Materials. Worst sector: Communication Services.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 44.41
VIX (neutral under 20): 30.74
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.95
CNN Fear & Greed: 24 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 37.78%
Stocks above SMA200 (neutral above 30): 33.06%
Number of stocks that increased yesterday by more than 4%: 326
Number of stocks that decreased yesterday by more than 4%: 79
Earnings Reports
Arlo Technologies ascended 29% to three-year highs after reporting a surprise profit in the fourth quarter. Snowflake’s forecast calls for slowing growth in product revenue growth, which makes up most of the total revenue. Clothes retailer Abercrombie & Fitch missed quarterly sales estimates on Wednesday with product shortages and omicron-driven Covid-19 curbs taking the shine off holiday-season business, sending shares down 7%.
Noteworthy earnings reports for today: $AVGO, $BIG, $CNQ, $COST, $TD.
What to trade today
Energy / Oils, Coal, Leisure and Fertilizers continued their good momentum. The volatility is still high and many stocks are facing big large bars, both green and red day after day. Wait for low volatility and decreasing volumes and a pattern is formed.
There are some good stocks showing very good RS, but it is still early to talk about a clear trend. Yes, they might just enter a new uptrend and in a few weeks the trend might look obvious, but I prefer to not be the first at the party for now. I rather lose this start of the trend than be caught in ample movements.
If trading, consider using a smaller position and tighter stop.
Upstart ($UPST) shows an interesting pattern and if volumes come in, it can be bought above the black line. Stop Loss at $148.
Cloudflare ($NET) formed a beautiful double bottom and continued to form a kind of handle as well. It might work above the black line with Stop Loss at yesterday low.
Nvidia ($NVDA) is in the same pattern as advised a few days ago, if it can break the channel line, it might work. Stop Loss at $231.
Doximity ($DOCS) looks constructive and a breakout above the black line might work. Stop Loss: ~$58.
Mercadolibre ($MELI) consolidates around EMA21 and SMA50. It might be a good signal if the mentioned averages cross and the price goes above the black line. Stop Loss at EMA21.
$Tesla ($TSLA) might break the downtrend and if goes above the black line with volume might work. Stop Loss around SMA200.
TaskUs ($TASK) has some good volume bars in the last sessions. It might go higher if above the black line. Stop Loss at ~$32.
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.
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