Alex's daily Market update & Focuslist - 03/28
Market under pressure, but find support at key levels
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GENERAL MARKET ANALYSIS
NASDAQ (NQ_F) Daily
Price Action Analysis:
NQ_F followed through on yesterday’s reversal today but found good support at the 10dma and channel DTL in the afternoon. We finally closed in the upper range, right at the 12735$ level and above the 10dma.
We are still in a PB inside that channel, but seeing the 10dma being defended like that is very constructive.
NQ_F is still above ALL KMA’s - uptrend.
On the upside (bullish scenario),
We have to reclaim FED’s high pivot at 13082$ to confirm continuation. But a 12801$ and channel DTL breakout would offer a good anticipation signal.
On the downside (bearish scenario),
As long as we stay above 12578$ base level, we must assume it’s healthy pullback action.
S&P500 (ES_F) Daily
RUSSELL 2K (RTY_F) Daily
Alex’s TAKEAWAYS
The market opened weak today but found support at key levels and closed in the upper range.
Despite seeing a weak breadth and strength in beaten-down & oversold sectors of the last few weeks AGAIN today. ($XOP $XLE $XLF $XME $XBI $PEJ $XRT, etc) The tech sectors that were leading recently found support where they had to today as they bounced off support levels or ema’s.
I’m not yet bullish, as we still have a lot of mixed signals, but I see the possibilities of a potential upside continuation move in the next few days. If we fail to follow through on this NQ 10dma bounce tomorrow and undercut it, this would be very concerning, and I would have to get back to a neutral stance.
Let the market prove itself tomorrow.
Bottom line:
NQ_F remains in an uptrend above all kma’s.
ES_F & RTY_F outperform NQ_F while it consolidates its recent gains.
Mega-caps that led recently showed strong support today and were defended at key levels. This adds bullish conviction for tomorrow, IMO.
The market breadth remains weak, and we don’t see enough individual stocks follow through on their breakouts—still a hard penny market.
ST breadth is quite extended and shows nice basing action.
The VIX is now <20. This is good.
DXY keeps decreasing, helping the equity market.
For these reasons, I remain neutral/bullish, but very cautious, as we still have many mixed signals from this market. (Less than yesterday)
Market health & Trend indicators:
IT_SIGNAL (NAHL): downtrend (red) + BELOW 50dma = INTERMEDIATE-TERM DOWNTREND (🟥)
ST_SIGNAL (NASI): uptrend (black) + BELOW 10dma = SHORT-TERM DOWNTREND UNDER-PRESSURE (🟨)
Tomorrow's economic news/events:
GAME PLAN:
With breadth possibly turning the corner (NYSI/NASI), I will look at liquid leaders and small/mid-cap stocks tomorrow to increase my exposure.
Using progressive exposure, we’ll test this market one step at a time.
FOCUSLIST
LIQUID LEADERS (MEGA-CAPS)
SMALL/MID-CAP STOCKS (PT UNIVERSE LIST)
INDICES TRADES
LIQUID LEADERS (MEGA-CAPS)
MSFT (BO10PB) - Alert: 283.33, SL: 272.05 / LOD
Been holding well the 270/275$ base area and the 5dma last week. We are setting up for a BORS setup this week if we can follow through with a higher high breakout.
UPDATE: It got supported at the 10dma and closed in the upper range of the day. Looking at that DTL breakout for an upside confirmation.
AAPL (BORS) - Alert: 162.14, SL: 155.98 / LOD
Another leading mega-cap that has been showing a lot of strength last week and surfs above the 5dma. We held the 155/157$ base area and set up a BORS setup if we can reclaim the recent swing high pivot.
UPDATE: We came inside the base area and found support at channel DTL. It closed in the upper range and above the 10dma. I'm watching for a channel DTL breakout to confirm an upside continuation.
TSLA (WBPB) - Alert: 198, SL: 185.43 / LOD
After Jan/Feb. move, we've been consolidating above the 50dma. We reclaimed all kma's and 180/190$ base area and retested those levels late in the week. I like the odds of this BORL setup if we can hold & push above that DTL.
UPDATE: Still acting very well on the kma's retest just above the base area and 50dma. We now have a very tight trading range that the breakout from either side will give us an indication of the next move.
AMZN (WBPB) - Alert: 100.99, SL: 96.4 / LOD
After the breakout of the kma’s & DTL on the recent push from the lows, we are consolidating right above the kma’s while making higher lows in this tight area. I would look for a breakout of that range for an entry.
UPDATE: Still in that consolidation range and held the 21dma and UTL again today. I'll be looking at this channel DTL breakout for an early upside confirmation.
SMALL/MID-CAP STOCKS (PT UNIVERSE LIST)
LNTH (BO10PB) - Alert: 83.82, SL: 78.55 / LOD
Following the power earnings gap (PEG), it broke out from its base 2w ago and pulled back to the 10dma in a tight channel and low volume last week. If it can breakout from that DTL & swing high pivot, we could see continuation higher.
UPDATE: Still building in the channel and acting well.
MAXN (BO21PB) - Alert: 26.61, SL: 24.5 / LOD
A recent big earnings winner is now forming a VCP pattern with higher lows above the 21dma. High ADR name that could move very quickly if we break the DTL as an anticipation entry. You can wait for more confirmation at the 26.61$ level.
UPDATE: It could not push above the DTL today, as the market was not there, but if the market collaborates tomorrow, we might see a breakout. Today we have potentially formed the last contraction of the setup on low volume and above the 10dma.
OKTA (BO21PB) - Alert: 84.95, SL: 81.79 / LOD
Recent earnings winner that is consolidation with higher lows at the 21dma. We are now very tight right below the DTL and volume is getting very low too. We are prime for a move.
UPDATE: It could not breakout from that DTL, but it showed a lot of RS all day. We are still above the 21dma and within reach of the DTL for tomorrow.
FOUR (BORL) - Alert: 69.85, SL: 66.45 / LOD
A hard name to trade, but the setup and tight consolidation are there. I like how we are holding these tight 10/21dma just above the 50dma while having higher lows. I’ll look at the DTL for an anticipation entry or the range level for more confirmation.
MELI (BO50PB) - Alert: 1216.28, SL: 1163.54 / LOD
Still building in that very tight range area just above the 50dma. We now have the 10 & 21dma being flat & squeezed, so a big move could happen if we break that ST DTL or reclaim the base level for more confirmation.
INDICES TRADES
I took an early entry off a U&R setup today (see below), but I would look at the channel DTL & 12801$ level breakout as a potential adding level or to initiate if you are not yet in the trade.
TQQQ trade shared today in the Discord:
PORTFOLIO UPDATE
INTRADAY/CLOSED TRADES:
SECTORS PERFORMANCE
Leading sectors:
SMH Semiconductors
The sector came under pressure and retested the 246.76$ level to the tick. We bounced to close above the 21dma and just below the 10dma. We are still in that PB channel, but this is a constructive first step in THE leading sector.
FDN Internet
We’ve closed below the 141.19$ level, but we held the 21dma and made a higher low. We are still consolidating in a healthy way above all kma’s.
IGV Software
Still building in a tight wedge above all kma’s and below the 293.41$ level. Watch for a DTL & 293.41$ breakout for an upside continuation in the software sector.
TAN Solar
Still consolidating below the 10/21dma and inside that tight range since last Tuesday’s bounce. I’ll be looking at a break of that range for an upside or downside continuation.
XBI Biotech
Still very weak today and was rejected at the 10dma and closed back inside the support area. The downtrend is strong, and until we see a clear higher low structure and kma’s breakout, biotechs are lagging.
XLE Energy
The energy sector was very strong today and pushed above the 10dma and the recent swing high pivot to make a new higher high. We were stopped at the 21dma, so tomorrow will be interesting to see if we can push above and retest the 83.06$ base level.
XME Metals & Mining
We broke out of the recent consolidation range and are now right into overhead resistance and close to the 21dma. This should be a good test if we can reclaim the 21dma and push above that 52/52.70$ base area. If not, we might rollover on a possible rejection.
XRT Retail
Still consolidating in that recent range and still below all kma’s. We need to breakout from that DTL & range for upside continuation. If not, a break below that range could mean a downtrend continuation.
MARKET BREADTH & INTERNALS
NAHL (Cumulative new 52W Highs/Lows & 50dma)
We remain down as NH can’t outpace NL yet. Breadth remains weak.
IT_SIGNAL: downtrend (red) + BELOW 50dma = INTERMEDIATE-TERM DOWNTREND (🟥)
NASI (McClellan summation index & 10dma)
We went flat today after yesterday’s reversal. Tomorrow will be important, either we confirm a continuation lower or higher.
ST_SIGNAL: uptrend (black) + BELOW 10dma = SHORT-TERM DOWNTREND UNDER-PRESSURE (🟨)
NAMO (McClellan Oscillator - Breadth extensions)
Small pause today, it’s ok.
NNL flat
NAAD (NYSE Net Advances/Declines)
Small NetDec today.
NAA200R (Stocks > 200dma - LT breadth)
Still in range.
NAA50R (Stocks > 50dma - MT breadth)
Still in range, but could not follow through on yesterday’s reversal.
NAA20R (Stocks > 20dma - ST breadth)
New low for the VIX and now below 20. We also broke below the recent UTL.
Downtrend continues as we followed through the 10dma rejection.
We remain in that base area. The next break will likely give us good information on the potential market direction.
DTL breakout and possibly an ST rally are possible from here. We have the 21& 50dma above so we might have some resistance.
ECONOMIC & EARNINGS CALENDAR
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LEADERS LIST
Overall leaders (PRIME Score)
AEHR,ELF,ALGM,ANET,PANW,ONON,FSLY,LSCC,LNTH,SMCI,IOT,CARG,DUOL,INDI,ACLS,DKNG,MAXN,CNK,FOUR,MELI,
Fundamental leaders (FA Score)
FRO,EURN,ALB,INSW,CALM,ASC,ELF,CPRX,DHT,MUR,H,PANW,ANET,HIMS,ALGM,AEHR,NE,BTU,NCLH,PR,
Technical leaders (TA Score)
FSLY,AEHR,DUOL,ONON,BBIO,ELF,IOT,ALGM,LNTH,SMCI,LSCC,ACLS,MAXN,ANET,INDI,CNK,ASAN,HIMS,FRO,CARG,
Relative Strength 1 Month (1M-RS)
DUOL,ONON,MAXN,ASAN,BBIO,ANET,AEHR,OKTA,FSLY,KBH,IOT,HLIT,SMCI,ELF,FLYW,DV,SHOP,CPRX,DOCN,PATH,
Relative Strength 3 Month (3M-RS)
FSLY,BBIO,DUOL,AEHR,ONON,INDI,ACLS,MAXN,LNTH,CNK,IOT,DKNG,ASAN,ALGM,HIMS,FRO,DOCN,LSCC,ABNB,ELF,
Relative Strength 6 Month (6M-RS)
AEHR,FSLY,ACLS,ELF,ALGM,SMCI,ONON,OII,LSCC,DUOL,HIMS,BBIO,PARR,IOT,RXDX,FRO,AIMC,INDI,SHOP,ASC,
REFERENCES
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