The Shakedown 3/31/19

ChopFest 2019

The first quarter wrapped up Monday and it will remain to be seen whether Friday's buying is meant to stay or if it was window dressing before quarter end. Will be locked in on where money is rotating this week.

We're still in a very difficult trading environment for the active traders. When both buying market strength and shorting market weakness is getting traders into trouble, very safe to say we're in a certified #ChopFest. This is not the time to be over-aggressive. We already have the next earning's season coming up when banks kick us off Friday April 12th. 

My own personal trading has been a complete mixed bag. I can look at examples of what I SHOULDN'T be doing by succumbing to the allure of the sexy fast money trades off the open -- they haven't been working and proper adjustments need to be made. These were great to us all January/February when the market was roaring but with March's consolidation period came a lot of fake-out moves off the open. You can paper cut yourself to death in these trades and kill your mental capital taking losses when you were in the trade for 5 minutes. 

I can look at what I SHOULD be doing with some trades where I'm focusing on the bigger picture, giving the proper amount of room and staring at the name for days and even weeks. These are weekly chart setups. I'm currently doing this well in WING and have been building a position in TWTR for the past week that I'm very confident will break to the upside after staring at the movement the last two weeks. You don't realize how much you learn about a stock by staring at it every day. 

I was very surprised to see a ton of nice charts in this weeks scan. Lots of macro bases out there looking to take out major resistance levels. That's where my focus will be.

With bio's showing strength Friday, many of the larger cap biotech's setting up at big macro levels

The Chinese names are showing a ton of strength and we've seen some FEASTY breakouts like Cris calling out ATHM Friday.

My favorites that still yield setups in them going forward.

(Also will be hawking MOMO, BZUN & WUBA for future setups) 

Val brought forth this FHL over the weekend, and it's exactly what we're looking for out of a growth name and I'll explain why.

We love the IBD Top 50 growth names because they showcase names with growing sales and revenues with the technicals to match. But by the time those stocks have made those lists they've already made 100, 200 & 300% moves and are on every trader's radar. When we can find names like this FHL with growing sales and revenue in recent IPO names, those are how you hit the major homeruns. We saw it recently in STNE a payment processor with amazing earnings and a Warren Buffett investment.

FHL boasts Triple Digit Annual Sales Growth + 70% growth last quarter alone & the fact NO ONE IS TALKING ABOUT IT makes this a very attractive name. The fundamental chart below courtesy of IBD. 

This DNLI looks to be in similar company being a recent IPO coming off its first profitable quarter on huge revenue, but the fact its a biotech makes it a bit less of a setup seeing as those names are so data/drug/news dependent.

DNLI numbers below courtesy of Yahoo Finance.

A couple Bear Flags just in case the world ends


I love this CSOD for a few reasons. The daily chart is coiling ever so tightly with the 200 & 100 sma's acting as major support with subsequent buying. We had a similar entry in IAC 3/18 where a strong name got so tight with a descending resistance line below a bigger resistance level above it. 

Now we can look at CSOD's weekly chart and we can see just how massive that 60 area is for the long term macro chart. We are getting a very tight entrance on the daily chart that could be the first step into taking out a major weekly/monthly resistance level. Using smaller time frames to get in trades that effect the larger time frames.

Trigger: $55/55.30

Stop: $52.89

Target: $65-70+

Hope to see you in the chat Monday!
Big Watchlist this week -- coming in following email.

Leave a comment