The Shakedown 3/3/19

Trend is your Friend

The overall price action is still quite bullish on the market from a purely technical standpoint. While we are not seeing the huge trading ranges we saw in the beginning of the year (which has a lot to do with short covering) the market is still grinding higher and showing strength. We have not seen any real selling, we have only seen slight corrective activity via sideways action. 

In the beginning of the week I was worried with Monday's huge gap up that faded all day that we may see some overall selling soon. However, the rest of the week we generally went sideways  (super healthy action in an uptrend) following by a big morning gap Friday that sold off in the morning only to close near highs - there is nothing about any of that activity that is bearish.

Now, we aren't seeing as many stocks breakout as we did a few weeks ago, showing us we need to be selective with the best names and the best setups, but we're still seeing the best earnings names move higher. As long as trades are working I will be involved. 

In these markets, over-executing kills you. So far we've seen every dip in the market be quickly bought so if you're adequately adjusting your stops, you're still in many of your trades. They want you to panic out of your stock. At the end of the day it's just sticking with your winners and cutting your losers quickly, as always. 


HMSY is a technical thing of beauty with it's strong Power Earnings Gap followed by a controlled pullback in the form of proper daily consolidation. Love the 8sma catching up Friday and the buyers showing their face at that point. It also has a long term resistance level in the 37/38 area dating back to 2012. Coming off a big quarter, HMSY looks pretty ready to go after last week's consolidation. Though the technical trigger is a bit higher at $36, the hourly chart is telling me this one is giving an entry through $35/35.15 area.

Trigger: $35/35.15

Stop: $33.89

Target $40+

Hope to see you in the chat Monday!
Watchlist coming in the following email.

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