The Shakedown 2/23/20

Signs of a Reversal

We got our first signs of a pullback starting Thursday with some downside follow through Friday. This could be the start of more selling, but the fact of the matter is the market is in a macro uptrend right now, so I would be much more surprised at a week of selling compared to weakness early on and a reversal to the upside later on in the week. The market has been so incredibly strong and every one of these pull backs have ended up being buying opportunities. The selling we saw Thursday/Friday was not a viscous sell off with stocks puking left and right. Futures are continuing the down move Sunday night so I would expect to be more active towards the latter half of the week.

There was a ton of relative strength (sector rotation) specifically in the biotechs and healthcare stocks as well as the risk-off safe havens such as energy and utilities, which is standard in a pull back. We did see relative weakness in many of the names that led us to these highs (GOOGL, AMZN & MSFT to name a few) so I will be closely watching these leaders to find support and reverse to the upside this week as a cue the market is ready to find support. You can't factor out this could be a top and it could be the beginning of more selling in the broad market, but with this market's trend the past 4 months, we have to watch for that uptrend support to kick in soon.

I definitely expect to be more hands off in the beginning of the week and we just saw the start of the selling, but I will be watching to see which retest area we find support at.

Earnings season is beginning to wind down but still have a jam packed week ahead. Some notable names reporting this week are SHAK, TNDM, SDC, SPCE, BYND, TTD, PLAN and many more.

Earnings season winding down a bit

Names I'm most looking forward to this week:

Monday AMC (after market close)

SHAK INTU TNDM GH

Tuesday BMO (before market open)

HD, M, TREE

Tuesday AMC

SDC, GWPH, PLNT, EXEL, JAZZ, CRM, SPCE, PANW

Wednesday BMO

CHK, LOW, PZZA, WB

Wednesday AMC

SQ, ETSY, TDOC, NTNX, NTES, BMRN

Thursday BMO

PLAN, CRON, BBY, KDP

Thursday AMC

BYND, ADSK, TTD, WDAY, DELL. VMW

Couple Shorties

BSX Long

Love the way this BSX is holding this major support area combining horizontal support with important longer term moving averages like the 100 and 200sma. I thought I missed it with the huge move it made off support Wednesday, but a weak market to end the week held this name down to give us another shot.

Coming off an inside day sufficiently holding that support area with major buying every time its met, it's only a matter of time until this one breaks upwards. Looking for an entry next week through that 43 resistance area.

Trigger: $43

Stop: $41.89

Target: $46-48+

Hope to see you in the chat Monday!

Watchlist coming in the following email.