The markets are ready to rumble this morning, with futures trading higher (+7.25) as we go to print. With SPY well past block resistance, many stocks on the S&P500 should continue higher in tandem with momentum. As a result, we will be adding to our bullish positions and trimming those that have lagged.
Watchlist for the Week
The Closing Print Watchlist reflects stellar performance to date, with few exceptions. We’d like to see energy continue higher today, helping KOS in the process. Semiconductors are trading higher in the pre-market session, so we will add to these positions as momentum continues.
We have swings in INTC, MU, AMD and NVDA. We will be considering covered calls on all four candidates. Criteria for a covered call; we would like to see price at upper Bollinger bands, with MACD and RSI showing a potential short term plateau in momentum. The stocks are in an uptrend or sideways consolidation.
Additional positions: Materials Sector
In addition, we started AKS Wednesday, thus adding to our materials sector (XLB) exposure. We also have Century Aluminum (CENX), with some exposure to the defense industry, as well as materials and industrials.
Monitor rotation into banks and financials. Candidates in this group have shown potential signs of interest, as money rotates into groups yet to participate in the recent break above resistance levels. Citibank and HDB show the best chart patterns, with the latter based in India. Look for HDB to forge a path higher, after its recent earnings saw prices pullback to the bullish 9/20ema.
Keep an eye on market internals. These need to stay strong throughout the day, as any weakness could signal a retest of Wednesday breakout levels. Futures have drifted lower (+5.25), in the time it took to write this post.
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