The Shakedown 4/21/19

Big Week Ahead

Huge week of earnings ahead with 552 public companies reporting throughout. That is where I will spend the majority of my focus next week, finding all the strongest reports and action that follows. This market is rewarding those taking fewer trades and letting the best winners work. We'll see a bunch of new market leaders emerge in the coming weeks as earnings season really gets into swing. Some reports I'm looking forward to this week are Amazon, Facebook, Boeing, Twitter, Microsoft, Tesla, Snapchat, Chipotle, Paypal and iRobot, to name a few. I am avoiding most stocks that haven't reported earnings yet.

The overall market is still technically healthy within the hyper uptrend but we're seeing many cracks underneath the surface as we march toward 2018 highs. We're seeing the market stall a bit at a major resistance area so I'm proceeding cautiously and mostly waiting for the best earnings names to deploy the majority of my risk. Sticking with only a few names and the best winners treats traders well in this market. 

A Couple Chinese Stocks Setting Up

CTLT Long

On Tuesday Catalent announced they are buying Paragon Services, a manufacturing partner for gene therapies. The stock exploded on the news as it helps Catalent become a major player in the gene therapy manufacturing market, setting the company up for accelerated long term growth. The gene therapy market, which treats rare inherited diseases, is likely to see a sustained growth of 25 percent in the near term. Drug companies have been aggressively moving into the market because they command some of the highest prices in medicine.

CTLT surged 14% right to resistance on the news and has since consolidated below that $45.50 level. With the volume since the deal was announced, I think this one goes after that resistance before its next report in 12 trading days on May 7th.

Trigger: $45.50

Stop: $42.49

Target: $56-65+

Hope to see you in the chat Monday!

Kept the watchlist super small this week as my full focus will be on the 552 companies reporting this week.

Will be filling the watchlist all week with the best earnings reactions.