Trading Plan: 31 May 2022
Nasdaq (+3.33%) broke from the W pattern and had a very good close above the EMA21… but with average volumes. I do not say it is not good, just I wish I saw more money entering the market. The trend is up in the last three days while the volumes are more or less the same. Watch if the price can stay above the EMA21 and advance to the SMA50.
SP-500 (+2.47%) reversed the trend. More than that, the price advanced farther and easily passed the EMA21 - it was not rejected by the EMA21 like before. All good besides the… volumes. Friday’s advance was made with lower volumes than Wednesday or Thursday’s volumes.
In the news
Oil prices jump after EU leaders agree to ban most Russian crude imports.
China faces a nearly $1 trillion funding gap. It will need more debt to fill it.
South Korea is betting on the metaverse — and it could provide a blueprint for others.
Canada plans to ban purchase, sale of handguns: ‘There is no reason anyone in Canada should need guns in their everyday lives’.
Sectors
Best yesterday sector: Technology, then Consumer Cyclical. Worst sector: Utilities.
Best weekly sector: Consumer Cyclical, then Technology. Worst sector: Healthcare.
Best monthly sector: Energy, then Utilities. Worst sector: Consumer Cyclical.
Sentiment
NAAIM (weekly, neutral between 70 and 90): 33.19
VIX (neutral under 20): 25.72
Equity Put / Call Ratio (neutral between 0.7 and 1): 0.90
CNN Fear & Greed: 21 (Extreme Fear)
Breadth
Stocks above SMA40 (neutral between 30 and 80): 42.98%
Stocks above SMA200 (neutral above 30): 28.57%
Number of stocks that increased yesterday by more than 4%: 697
Number of stocks that decreased yesterday by more than 4%: 56
McClellan Oscillator (neutral between -100 and 100): 209.10
Earnings Reports
Salesforce ($CRM) has had a rough year on the charts. For Salesforce's first-quarter earnings report, due out after Tuesday's close, analysts, on average, are calling for earnings of 94 cents per share (-22.3% YoY) and revenue of $7.4 billion (+23.3% YoY).
Other noteworthy earnings reports for today:
What to trade today
In theory, when the market is already in an overbought state and the advance was not supported by volumes, a pullback is expected. But in the real-life what is overbought can be more overbought, please do not forget. Remain open and consider trading smaller positions.
Very good results for the Friday stocks:
$GDYN
$OLN
Today Watchlist:
Advanced Micro Devices ($AMD) is trying to pass an important level. If succeded, the trade might work. Stop Loss: SMA50 / 5%.
Vertex Energy ($VTNR) had an outstanding advance recent with high volumes while in the correction the volumes were low. A breakout above the black line is possible. Stop Loss: 5%.
Affirm Holdings ($AFRM) advanced with good volumes. If the price passes the resistance zone (black line and SMA50), the long trade 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.
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