Financials remain strong,
despite the overwhelming interest over the past few weeks. As a result, we see several stocks in the IBD50 that show potential follow through, as they break out of sound patterns.
Financials and the IBD50
Most of the technology stocks on the IBD50 list saw profit taking on Friday. As a result, fewer setups are from this industry group. Financials, on the other hand, are performing remarkably well. One IBD50 stock, in particular, fits our criteria for continuation.
ESNT was on the watch list last week as well. Follow this one higher and move stops accordingly. SOTEMA is bullish. RSI and stochastic are rising, while MACD pushes higher above its signal line. Volume confirms institutions are present. A measured move gives us our first target of 49.55, though we could see much higher prices in the short term due to the strength in home builders.
Restaurants and Bars
This industry group has seen lots of institutional interest. Recent swing trades on SHAK and SBUX have done well, while WING appeared on the IBD50 for the first time this weekend. This setup looks very promising.
Bollinger Bands are tight. SOTEMA is bullish, while RSI turns higher. MACD, stochastic and volume are supportive. A pullback into Friday’s price action would be ideal, as pre-market price action suggests. The stock is off (-0.20) and would be an opportunity should we start seeing buyers shortly after the opening bell. Wait for the Opening Range (9:45-10AM) if it doesn’t recover immediately.
This week we are especially focused on RSI. All of the stocks on the watchlist have seen RSI turn higher. Most of them should break higher if their respective SPDR sector(s) reflect the same character.
Welcome to the new members and good luck to everyone!
Most of all, Happy Monday,
Vinny