Alex's daily Update & Focuslist - 07/28

PrimeTrading

Alex

Jul 29, 2022

Good evening folks,

Bullish scenario triggered…killer AMZN & AAPL ER reaction… good reaction on a 2nd negative GDP…are we good for a rally?

Let’s go!!✌️🛡️

MARKET REVIEW

Quite a day!

We pulled back to the 5dma right at the open after a pretty good reaction to a second GDP negative print. We then managed to grind higher all day to finally close above 12655$ the recent swing high, confirming yet ANOTHER price structure higher high.

Then came AAPL & AMZN earnings report at the close that lifted the market another 1/1.5%.

I will be looking for potential overhead resistance around 13184$, which was a pretty big support level from where we had our big rally back in March. Until then, I think we have a pretty uneventful 3.5% move up for Nasdaq.

That level breakout triggered my BULLISH scenario as explained last night, I then increased my portfolio exposure by 50% with Nasdaq exposure, leading sectors ETF and a market-leading stock that I was eyeing for a while.

I will look to possibly increase my exposure to 100% in the coming days as the setups in quality stocks proliferate. (If that happens, if not, it’s a red flag to lift the gas) It’s time to be more aggressive based on the current market action.

Remember that we are in a bear market, and we are playing a rally, which means the market can roll over anytime despite the good action we are seeing right now. 🛡️

BULLISH scenario:

We are now in my bullish scenario until further red flags or consolidation.

IF:

THEN:

BEARISH scenario:

I give some leeway to the market to consolidate in a healthy manner before switching to a bearish scenario. Remember, the market & stocks don’t move in straight lines. We have a rally, watch how we react on the pullback and especially on the kma’s retest.

IF:

CLOSE below 12578$
CLOSE below 50dma

THEN:

Reduce long exposure and treat this reversal as a potential rollover

Alex’s digest:

Leading names are holding key levels & breaking out (+)
NQ with follow through day after yesterday’s FTD (+)
Good reaction on bad GDP numbers (+)
SMH (Semi’s) & TAN followed through (+)
Market breadth retest & continuation. (NNH,>50dma, etc) (+)
Speculative money back strong (Bitcoin) (+)
USD & VIX drift down (+)
2Y & 10Y bond yield selling off (+)
Crude oil (CL_F) unable to breakout of that support area AGAIN (+)

👀

MARKET BREADTH

MMFI (Stocks > 50dma) - Retested the recent swing high pivot this morning before following through and closing 6% higher. That’s the type of action we want to see on breadths indicators…dip being bought.

VIX - 4% down at 22$. That’s the slow grind down we want to see in a rally. good!

USD/CAD - Retest of the 50dma and rejected. Back to support area lower level. If we break that level tomorrow, could mean a big way down. This is very good for equities.

HYG/IEI (Credit Spread) - Credit Spread rejected top of the support area. Risk is not being priced in.

BTC/USD (Bitcoin) - Big move in cypto’’s today! Been able to follow through on that support area breakout and also breakout of the 50dma. If we can breakout of 24 280$ recent swing high tomorrow, we could really get going. Speculative $ is here.

ECONOMIC CALENDAR

SECTORS PERFORMANCE

(SMH) Semis - Pulled back inside 232.14$ level this morning but managed to close above it. We then confirm a higher high. Leading sector.

(TAN) Solar Gapped up as expected on BIG VOLUME. This is normal to see this stalling action as we are digesting recent gains, but it’s really positive that we were able to stay at an open price and not failed that big breakout. We’ll have to see how we consolidate in Solar and eventually find a low-risk entry into leaders like ENPH & SEDG.

(XBI) Biotech - XBI Lagged the entire market today… Price is still in that tight consolidation above the support area, so I’m not too concerned about it. This might take the lead in the next few days as SMH & TAN take a breather. Until we stay above kma’s & support, we’re good!

CL_F (Crude Oil) - Failed the support area top level again today. That 99$ level is very challenging and we can’t seem to find enough strength to go through. Might need a bit of consolidation at these levels before breaking out for real.

LEADERS LIST

Overall leaders (PRIME Score)

BEAM,CELH,VTNR,ENPH,PLAB,CPNG,PAYO,HDSN,TH,STEM,GRBK,VET,HIMS,YMM,SQM,LSCC,LNTH,AHCO,ON,DVAX,

Fundamental leaders (FA Score)

MRO,AMR,HDSN,ARCH,SQM,NFE,OXY,PLYA,METC,HCC,PXD,CAN,DINO,MXL,GSL,LBRT,HST,HUT,DEN,CALM,

Technical leaders (TA Score)

TH,BEAM,ENPH,IEA,VTNR,PLAB,STEM,CELH,GRBK,CPNG,PAYO,VET,LSCC,HIMS,AR,SEDG,EQT,LNTH,ON,AHCO,

Relative Strength 1 Month (1M-RS)

SI,RIOT,HUT,IEA,TH,AFRM,IS,COIN,STEM,CPNG,BEAM,SGRY,PAYO,APPS,CYH,LPI,VET,CNK,MXL,TELL,

Relative Strength 3 Month (3M-RS)

SIGA,TH,YMM,BEAM,GFF,QURE,DQ,AHCO,STKL,DVAX,CELH,PLAB,ENPH,AGEN,PDD,HRB,BKSY,IEA,VIR,ELF,

Relative Strength 6 Month (6M-RS)

TH,SIGA,VTNR,CEIX,LNTH,HDSN,ENPH,CELH,DQ,STKL,NFE,EQT,HRB,AR,PRCT,SQM,QURE,GFF,YMM,IEA,

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Alex’s FOCUSLIST

BEAM 🎖️

One of the strongest names off the lows is now set up with a beautiful BO10PB setup. This just had a 150% run in a month or so… so when I see this type of strength and the stock gives the first opportunity to get in with a lower risk entry at the 10 or 21dma…I go aggressive for the jugular.

UPDATE: Tight day as the whole sector is consolidating, nothing wrong here and keeping the alert at the same level.

Alert - 70.49$

GTLB

This name is back in the FL after pulling back to the 50dma & to the previous breakout support level. I will try to position again in this name if we can breakout of the DTL and today’s high pivot.

Alert - DTL + 56.40$

CHPT

EV chargers company that I know very well for working in the sector… This whole sector found a big bid today as all related stocks rallied on BIG volume. When you see a big volume like that in the entire sector, you take notes and try to position yourself if it can follow through on it.

I see a WB setup that we broke out today. I will play the last swing high pivot for an entry.

Alert - 15.83$

SI 🎖️

All Crypto stocks a shaping up for a big breakout after they all retested their stage 1 base breakout level. I am interested in SI, as it is the one that is showing the biggest Relative Strength and is to striking distance to its breakout swing high pivot. That will be a way for me to get crypto exposure.

Alert - 94.60$

CPNG

I see a first real pullback following the stage 1 base breakout. We are pulling back to the 21dma and found support at the first swing high out of stage 1. If we can breakout of 17.86$ most recent swing high, we would confirm continuation.

Alert - 17.86$