PrimeTrading daily Update & Focuslist - 05/02 (WEEKLY EDITION)
Good evening,
Another bad week in the market, let’s see if we can find some positive & potential opportunities for the week ahead!
Enjoy ! ✌️
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
Market REVIEW
Now that we rejected 4300$ level early this week and close down & very weak, an undercut of Feb. 24th 4128$ level is very likely. Trend is down and I’ll watch for next area of potential support this week. (see chart)
Price below all kma’s and extension from 50dma still below 10%.
In this kind of environment, you have to acknowledge that:
1- Trend is down
2- Few names setting up & B/O are failing.
3- Breadth is very bad and momentum picking up
Our job as risk manager is to respect the current downtrend, adjust risk, exposure and wait that the conditions are right for our trading style. Right now, no exposure is better than bad exposure imo. (unless your a day trader ;))
One week at a time. I’m always an eternal optimist, but I also understand that based on history, we could be very early in the making if we take the major bear market cases.
Breadth:
Breadth is overall terrible. Stock > 50&200 are mid 20% and we could see #’s lower even in the 10’s before finding a meaningful intermediate bottom.
NNH still around -500 and NAD close to -2000 is very very weak.
E P/C ratio is yet nowhere at extreme…
Sectors:
Only 3 sectors green this week was Energy, Oil & Solar. These could continue to show relative strength in the coming weeks imo. Overall, these sectors offer the only stocks with still “decent” and not destroyed charts.
Staples only green sector in April. This is not good as Staples is a very defensive sector that outperform during recessions.
Portfolio UPDATE
Well, covered my market short position way too soon, but still made a good return. Positions that I took Thursday failed as SPX was not able to bounce from important support level and closed the week below 4219$ & 5dma.
Was too aggressive with 3 positions. Should have opened 1 or max. 2 only and wait for confirmation on which I would have build on. Lesson learned.
New positions:
Trimmed positions:
Closed positions:
SPXL (Closed at the open )
CELH (Closed at the open )
UAL (Closed at B/E)
Daily FOCUSLIST
Relative Strength TRACKING
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 - TOP 20:
AMR,CEIX,PBF,ARCH,CRK,AR,ARLP,EQT,SD,VLO,CVE,PTEN,HP,REI,TALO,SWN,FLNG,DK,ATI,CTRA
REFERENCES
Articles on my system:
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