These Top 10 healthcare, technology, materials, energy, and industrial stocks suggest a broad segment of the equity markets are participating in keeping the S&P500 pinned at 4700 “major gamma” resistance. We’ll continue to swing these stocks with trailing stops in place.
Summary
Watchlist Performance
CF Industries (CF) manufacturers nitrogen and urea fertilizers, leading the group and its competitors. Earnings surged (1120%) compared to the previous quarter and (253%) for the year.
Traders and investors helped push the stock above its 50d in the third week of September. Volume was significantly higher as CF broke out in the following weeks, rising along its bullish 9/21d moving averages. Institutions were actively accumulating shares.
Price action consolidated gains for the past three weeks, followed by a surge in volume, as the stock breaks out of a bullish descending channel. This points to the presence of institutions at work accumulating shares.
RSI is above 50 and rising. MACD is about to cross, while stochastic rallies off oversold conditions. Bullish follow through is likely.
Watchlist – Top 10 Stocks
Breadth, volume and price action in these stocks suggest there is potential for further gains.
| CF | CF – CF Industries Holdings, Inc. | Materials | Specialty Chemicals | 62.54 | 5.64 | 3990899 |
| COIN | COIN – Coinbase Global Inc. | Technology | Software | 353.92 | 5.01 | 8477886 |
| ZS | ZS – Zscaler, Inc. | Technology | Software | 350.17 | 3.45 | 1942800 |
| AMEH | AMEH – Apollo Medical Holdings, Inc | Health Care | Health Care Providers | 88.21 | 2.58 | 378443 |
| FDX | FDX – FedEx Corp. | Industrial | Delivery Services | 248.53 | 2.37 | 2611273 |
| PBA | PBA – Pembina Pipeline Corp. | Energy | Pipelines | 34.40 | 1.75 | 1469298 |
| CYBR | CYBR – Cyber-Ark Software Ltd. | Technology | Software | 197.21 | 1.54 | 361294 |
| EW | EW – Edwards Lifesciences Corp. | Health Care | Medical Supplies | 119.54 | 0.75 | 1449769 |
| JETS | JETS – US Global Jets ETF | 24.79 | 0.65 | 24470326 | ||
| COP | COP – ConocoPhillips | Energy | Integrated Oil & Gas | 75.93 | 0.64 | 6956222 |
| LMT | LMT – Lockheed Martin Corp. | Industrial | Defense | 341.78 | 0.56 | 1730772 |
We’ll look for follow though today.
If the stocks exhibit the characteristics presented below, we should see further gains.
“The Setup”
A stock or index is said to be “inplay” if the following conditions are met:
- Price opens strong and breaks out after the opening ramge.
- Price remains above a bullish sloping VWAP.
- Relative volume (RVOL) is signifactly higher than the previous trading day.
Click to enlarge
CF Industries (CF) started the day breaking out of its opening range on higher volume. Relative volume (RVOL) was greater than 2 times that of Friday.
Stochastic and MACD suggest conditions have reset for a potential follow through day.
All of the top 10 stocks in the watchlist have similar conditions.
Price broke out of the opening range on Relative Volume (RVOL) that was higher than the previous trading day.
VWAP was bullish and sloping higher through out the Monday session.
Price action stayed above this key indicator, with the stock “inplay.”
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Happy Trading,
Vinny
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