The Shakedown 1/26/20

Toppy Signs

We saw stocks very weak Friday after a nice recovery Thursday as news continues to spread about the severity of this Coronavirus out of China. The market will care about what it wants to care about, and it appears the Coronavirus will likely be the reason we finally get that long-awaited pullback. We saw stocks gap up off the open Friday, only to sell off the entire day, giving us a bearish engulfing day at highs. Given the context of the hyper uptrend run we've been on, this is the sign we need to see that we will likely pull back from here.

We are seeing this virus spread all over the world and haven't seen true signs of containment so this headline is just beginning to ramp up. You have to figure the multinational companies doing a great deal of their business in China will be affected. AAPL SBUX and MCD are the first few that come to mind. Disney does about ~11% of their total revenue from the Asia-Pacific region. Apple makes ~$44 Billion a year from China. I'm not saying we should panic over this, but be aware that if China gets shut down due to containment, many of the big boys can get hurt. 

With earnings season about to get into full swing over the next few weeks, there will still be selective stocks that shake off any market weakness and continue to break out. For this reason I will begin tracking all the strongest earnings names, this is where we want our focus going forward the next 6 weeks. 

Earnings season gets into full swing this week

Names I'm most looking forward to this week:

Monday AMC (after market close)

ASH, FFIV, JJSF, SANM, WHR

Tuesday BMO (before market open)

MMM, HCA, LMT, PCAR, PFE, BPOP

Tuesday AMC

AMD, ALK, AAPL, CNI, EBAY, MRCY, OSIS, SBUX

Wedenday BMO

ANTM, ADP, BA, DT, GD, MCD, NDAQ, SLAB

Wednesday AMC

ALGN, FB, ILMN, MSFT, MDLZ, PYPL, QRVO, NOW TSLA

Thursday BMO

BIIB, LLY, IIVI

Thursday AMC

AMZN, AMGN, EPAY, EA, HA, PFPT

With signs of a pullback looming - I am not chomping at the bits to get into new swing positions early Monday! We can see there will be a lesser quantity of technical setups with the market looking like it wants to pull in

RGLD Long

Yes, Yes I am well aware that RGLD is a mining company specializing in gold, silver, copper etc. The fact of the matter is these names usually trade somewhat inversely to the broad market. Not on a 1 for 1 basis, but in a very general sense.

Couple that information above with the technical chart that RGLD is putting in, and you have a really great setup. Love the fact RGLD is basing on top of its 200sma, which coincides with a macro support level. The two weeks of tight consolidation seems to be just enough time for this stock to signal its ready to break higher off of support, giving a clear trigger at $116.

The weekly chart shows the tight inside week, buyers meeting sellers, right below the resistance level

Trigger: $116

Stop: $111.89

Target: $128-136+

Hope to see you in the chat Monday!

Watchlist coming in the following email.


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