The Closing Print live trading and financial blog during market hours.

News out of China this weekend impacted the equity markets and the S&P 500 futures on concerns of a pneumonia-like virus spreading across Asia. In addition, Moody’s downgrade of Hong Kong’s credit rating continues to weigh on sentiment. As a result, many stocks are pulling back in early trading, representing what could be a buying opportunity this morning if futures continue to rally.

The coronavirus claimed four lives over the weekend, with hundreds of confirmed cases reported across China, raising fears of a rerun of the SARS epidemic many years ago.

S&P 500 Pullback Opportunity

SPY is extended so hedging into the rally last week was a good idea in hindsight. S&P Futures are (-10.00pts +/-) in early trading, showing signs of buyers as the index futures rise from the morning lows.

SPY will most likely test the 9ema if weakness persists, so we have that as a potential buy zone should price action retreat.

A reminder, in the watchlist indices section we post the expected moves for the week, which for SPY is 328.96 or 334.94 (2.99 +/-). Coincidentally, the lower values are near the 9ema. These numbers are derived from SPY options closing prices the previous Friday.

Opportunities on the Pullback

Many stocks are pulling back this morning, representing a day trade opportunity if buyers show up. Chinese stocks are lower across the board, with potential day trades in BABA, BZUN, CWEB, JD, IQ, HUYA, MOMO, PDD, VIPS, WB and Luckin Coffee (LK) among others.

There are additional stocks we’re watching this morning as well, chief among them, AAPL, FB, and NVDA. Weakness this morning should be an opportunity for day trades in the FANG stocks.

Luckin Coffee (LK) has rallied more than 144% since the November breakout (21.00 +/-). The recent flag (44~47) is being tested this morning. If this flag holds we’d expect to see buyers and an opportunity to trade with them. RVOL needs to exceed (+2) for confirmation.

LK is trading down (-2.08) in the early hours, at 47.90.

Click to enlarge

We mentioned LOW as a potential trade on Friday, as such some members took a bit more risk and bought calls on the prospects of a potential bullish follow through day.

Bollinger Bands are tight and showing signs of expanding, top and bottom. This suggests a fast move is imminent. Recent examples, CGC and BYND exploded when these conditions presented a trade setup similar to LOW. In addition, expectations are elevated given Home Depot’s (HD) performance last week.

RSI is rising, as a function of price, and volume created a pocket pivot. Volume exceeded the previous 10 days selling volume, suggesting institutions were active in the name.

Wait for the opening range (9:30 AM ~ 10:00 AM) before entry, then place a stop under the low of the opening range to start, or under a flag or consolidation if the stock breaks higher immediately this morning.

Watchlist Stocks

Stocks on the watchlist need to hold the levels noted as support therein. We will wait until the opening range has traded out before doing anything with these candidates.

Netflix (NFLX) Earnings will be reported after the close.

Join us today in the trading room for our LIVESTREAM broadcast

during market hours, as we navigate the current environment. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.

Happy Trading,


Want to become a member? Check details here:

Disclaimer:  Do your Own Research

Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional investment advisor in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Trades and or positions listed and taken from the watchlist are my own and should not be considered “advice” to enter any particular position or asset.

Investment Warnings

We would like to draw your attention to the following important investment warnings. The value of shares and investments and the income derived from them can go down as well as up; Investors may not get back the amount they invested – losing one’s shirt is a real risk; past performance is not a guide to future performance.

Live Sessions

Live broadcasts are educational in their content. Proper risk management is considered on every trade or asset mentioned. 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. 

As always, the use of technical and fundamental analysis is encouraged in order to fine-tune entry and exit points to average seasonal trends. 

These mentions are stocks that we may or may not decide to trade as outlined in the watchlist. Always use a stop.