Alex's daily Market Update & Focuslist - 05/31 🖊️
Hello folks!
Hope you had a very good Memorial Day, now it’s time to get back to work :) Window of opp. continues to open…
MARKET REVIEW
Well, that was one hell of a day Friday! I was looking at a potential 21dma resistance, but we went right through it on strength with a 2.5% move.
Futures continued to rally today and found resistance at the 50dma.
Upside:
I’m looking first at the 50dma for potential resistance, as this is probably the most important EMA in my system.
Next upside levels of interest will be:
4220$
4310$
We just had a 8% move in 4 days, so it would only be healthy if we can take a pause and pullback a bit here imo. I would specially like to see backfilling action to begin the week. We tend to open weak and close the week strong during rallies.
Downside:
I’ll be first looking at 4140$ to hold short term, then 4104$ at a last support if we want to stay strong in this rally.
We might have our first stress test early this week, so we’ll see if the bulls will step in and defend this rally. Stay tuned!
MARKET BREADTH
NET new 1M & 52W high again on the NYSE! 1M highs on NDX.
McClellan now really really overbought at 350… this is a bit concerning and could reinforce the 50dma ST resistance to retest the 4140 or 4104$ level.
VIX had broke his wedge on the downside just like in March during power rally. Now we want to see a slow drift down so that volatility can quit this market during the rally.
ECONOMIC CALENDAR
SECTORS PERFORMANCE
Retail & Oil/Energy are clear winners last week.
Crude Oil (CL_F)continues with 116.50$ base breakout. Momentum is building up and keep an eye on Oil stocks, because if the commodity continue & follow through tomorrow…well we could see a real bull run in Oil.
NG_F (Natural Gas) Still hanging after his 2 failed breakout attempt. Action in natgas names like EQT & SWN tells me that investors are bidding a breakout that could happen this week. I like how we found support at the 10dma and we refused to sell-off despite this failed attempt.
PORTFOLIO UPDATE
Another good day for my portfolio. I did not trimmed positions Friday but will be looking to do so tomorrow if we gap higher and show strength.
I opened 2 more positions Friday as many names were setting up very good.
I am past my Market based Exposure, but I have so much cushion, that I could be 100% exposed right now and still not be in danger (based on my PE limit). Now with the market being stretch a bit, I would try to not increase exposure too much before the bulls prove themselves on a pullback.
New positions:
LNTH (Opened on the 67.35$ pivot breakout I shared Thursday night)
SL @ 65.68$
TELL (Opened a bit before the 4.69$ alert I shared. When I saw market strength, decided to play the more aggressive DTL)
SL @ 4.51$
Trimmed positions:
Closed positions:
DAILY FOCUSLIST
4 names in my FocusList tonight.
We have again a lot of runners that broke out from their pivot in the last few days and are past good R/R buy point. We still have a few setups, but far less than last week.
Tonight’s names are in these sectors:
Oil
Transportation
Chemicals
Refrigeration industry…🤔😅
Remember to use progressive exposure to finance the risk of your next position. One step at a time, don’t load the boat, there will be PLENTY of occasion to jump in stocks on this rally. Managing Risk is your JOB #1
GNK - Continues to flag at the base breakout level and is being supported by the 5dma. It refuses to reject that pivot and for me it’s a clear show of strength. I am still interested in the 25.64$ pivot for a BORS confirmation and potential trend resumption.
FLNG - Still within that wedge and had a very tight action Friday. My alert is at recent swing high 28.34$ for a potential WB confirmation.
DOW - I’m seeing the WB & BORL setup here in this chemical name. Some could say it’s a beautiful cup n’handle. It’s still a riskier trade tbh, as I don’t really like the large swing within this consolidation…but this reminds me MOS & CF back in March power rally. Everyone were scared of this wide swings within their wedge, but still rallied really hard. Just keep in mind that probability might be lower in this one.
HDSN - Very strong & volatile name. This is top of my RS list for a while and I’ve been eying it to find a potential entry. I think we might have an interesting level to have a good R/R on this name. I see very tight action around the breakout level along higher lows.
Notice how we tried to breakout on Thursday, before coming back into this area to be supported Friday right at the 10dma. I see an intraday BORS setup in there, which I’d like to play with a 10.04$ recent swing high as being my alert to confirm the setup.
Reminds me of…AEHR last year.
RELATIVE STRENGTH
I’ll start tracking top fundamental stocks with highest 6 months Relative Strength, holding up the best short term. (40% 1M-RS + 60% 6M-RS ratio).
During market correction, you want to keep track of these names as they will be the one to watch when conditions improves.
Relative Strength 40/60 - TOP 20:
CVI,SD,AR,NINE,KOS,HDSN,OXY,SQM,CRK,NFE,SWN,WTI,VTNR,PTEN,ESTE,CIVI,RRC,CTRA,CPG,VET,
Relative Strength 1 Month - TOP 20:
PRPL,LTHM,SQM,CELH,AFRM,SM,PLAB,ESTE,SQM,DVAX,WTI,DLO,CAL,SD,RUN,DOCN,NOG,RELY,MTDR,CIVI,
REFERENCES
Articles on my system:
I really hope that you enjoyed. If you did, please share it so that more folks can be reached and this Newsletter can grow. :)
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.