I cannot stress enough the importance of keeping an open mind in the current market environment. Stubbornly sticking to a thesis will guarantee you one thing: You will miss out on some great opportunities. There are strong arguments to be made for both bulls and bears at this point. Let’s take the 200 day moving average on the S&P 500, for example. Bears will claim that since breaking down through it on heavy volume, we have been chopping around below it for quite some time, and that our next move is lower from here. Bulls will claim that the 200 day is still rising, and that during the 2003-2007 bull run, every time we dipped below the inclining 200 day m.a., it turned out to be a terrific buying opportunity.
Regardless of what your gut tells you, there is no excuse for not being prepared. Should we sell off again and make new lows, I have no problem keeping a high level of cash and dabbling in some inverse ETFs. If the bulls regain the initiative, however, I want to know exactly where to look. Having a watchlist of stocks that have performed brilliantly throughout this correction is essential.
Below, you will find my top long ideas for the upcoming week. Assuming a healthier market, I will be monitoring these names closely for a long entry. Feel free to pick and choose whichever setups best fit your style. I urge you to use stop losses (I prefer a trailing stop of 7-8%, on average) in order to mitigate your downside risk. Please note that these are merely trading ideas only.
In addition to the ten charts below, I am also monitoring: $CRM $VMW $DECK $APKT $LULU $NFLX $MDAS $NTAP $FFIV $CSTR $CRUS $ARUN $DLTR $DTV $UTLA.
I hope you find these helpful.
THOR is ready. Nice setups.
Thanks RC.
Once again, nice charts, very well done and visually pleasing. I am curious why are posting only the long setups when you find the market somewhat ambivalent. Do you do any paired trading or hedging with inverse ETFs?
As I indicated in my post, I am posting longs for the sake of thoroughness. If the market moves down, I prefer cash and inverse ETFs.
Some nice setups there! Does the lack of volume on most of these plays bother you? Are you going to wait for the volume to come in or just going to go with the price action? Thanks!
Thanks, PT. I agree about volume. But the Feb-April run up was on low volume too, so I’ll go with the flow lol.
What a generous, well thought out presentation of what’s going on “under the hood” of your book. I always learn/get reminded a ton of stuff from every one of your posts. Thanks Chessnwine!
Thanks for reading and for the kind words.