At the Closing Print, we strive to maintain consistency in our approach to the markets.
To maintain consistency, it’s important to establish a workflow. We start by doing our homework every weekend. This begins with an assessment of the markets, macro trends and catalysts that will affect our decision matrix. After analyzing individual sectors, we finish selecting the “winning stock picks” for the weekly watch list.
We use a strategy to gauge the probable short term performance and identify market conditions that will provide a tailwind once we enter a position.
BABA has met our stringent criteria, so we are adding this candidate to the watch list. SOTEMA is bullish, supporting price in its recent consolidation. RSI is rising with stochastic. Volume on Monday was solid.
We are looking for an entry at 125.50 or better. Pre-market price action has BABA trading 124.92 as we go to print. Monday’s low 123.87.
Futures are currently pointing to a lower open, so we will wait to see how the NDX100 trends during the “opening range” and how BABA fairs. We will gauge our entry using the 9/20ema and 5min TD setup.
ATVI is showing potential as well, with price squeezing into recent highs. SOTEMA is uber bullish. Pre-market activity suggests traders see an opportunity. Use the “trade of the day setup” for entry and start with a scalp rationale. If the stock closes near the high of the day, consider taking profits on half your position and swing the rest.
The technology sector (XLK) has shown the most resilience. Most days, the sector is green. If this character continues, it would add a catalyst to trades taken on technology stocks. The same thoughts apply to the consumer discretionary sector (XLY), which applies to ATVI and BABA alike.
As alluded to at the beginning of this post, we are watching the markets for more consolidation. There is a possibility that we might test the rising 9ema on the daily charts as well. If all goes as planned, we anticipate the markets will give us direction into summer. We need the indices to move higher, iiin order for the watch list to perform.
Have a great day,
Vinny
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