The Shakedown 4/4/21

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LAST WEEK, S&P 500 (+1.17%)

Monday: +1.61%

Tuesday: -0.05%

Wednesday: -0.27%

Thursday: +0.41%

Friday: +1.08%

After last week's big turnaround, we saw follow through all week in the broad market as the S&P closed the week out above the illustrious 4000 number at a new all time high. The market, very broadly speaking, is still in grind up mode until we see something drastically change. We have continued to see last year's losers lead the market, namely financials, industrials, energy and utilities. We did get a big bounce back in the tech space which has not been nearly as strong as its counterparts, coming off a year that saw the QQQ index lead tech names to a ~30% gain.

We're seeing week in and week out how important it is to recognize a changing market's characteristics. We're sitting at all time highs in the S&P and Dow Jones, but the road to highs has been much choppier than the path we saw last year. The important part of this recognition is how differently names are trading this year, where you could get away with buying any breakout and making money last year, to this year where you have to be much more tactical in both your name selection as well as trade setup selection.

On a shorter term trading basis, QQQ had a huge 3 day run off support, I'm anticipating a pullback early in the week to recent resistance areas as it looks to retest those areas. It held an immensely important support area last week and launched higher, telling us the buyers remain in control. But this week I'm looking for those buyers to step up to form new support. The SPY and the Dow Jones are cruising along and look very healthy from a technical standpoint. Buying strength has not paid nearly as well as buying in the hole this year though, as we saw last week. So walking into the week in the context of last week's closing strength, I would anticipate to be more active in the latter half of the week as many names likely need some sideways action.

Other than that I want to limit myself to the best ideas and best acting stocks out there. This is not a time to have a shotgun approach with risk. This is the time to lock in and find the best Easter eggs. 

Earnings This Week

Click the above picture for a full list of the companies reporting this week

*MAKE SURE YOU KNOW WHEN STOCKS

YOU'RE TRADING HAVE EARNINGS*

EL Long

Estee Lauder, EL, is a multinational manufacturer of makeup, skincare, fragrance and hair products. In the past week and change I've been in Denver, NYC & Mexico (humble brag) and the common denominator was that I've seen more people out and about than at any time in the last year. The roaring 20's are beginning folks. People are going to be buying makeup more often now than when they were never going outside, that's for sure.

Estee Lauder has had steady growth in their earnings. They recently partnered with a sustainability company to make their packaging more earth-friendly. The earnings flag on the daily chart is a thing of beauty coming off 6 weeks of consolidation following the gap-up. The macro trigger for this trade is through the 298-300 area (which is what I meant to write on the chart above). The more sideways we get before the stock takes on that level, the better the setup comes.

With a nice pivot Friday that's looking to turn the micro support area of 289 into new support, I may look to take this long first through Friday's high at 294, which would ideally setup with an intraday bull-flag. Otherwise the trigger is through the macro resistance level at 298. 

Trigger: $294/298

Stop: $288.89

Target: $320-330+

Click Below for this week's Watchlist

Hope to see you in the chat Monday!