Wednesday April 8th
Just about all sectors of the market gapped open yesterday and then, instead of the usual early morning or midday gap fill with a continuation higher, they sold down into the close. That left the markets with what would normally be ‘reversal candles’ and that selling might find a little follow through. For that reason, I’ll review the sectors and discuss what we might do if the sell down continues.
NASDAQ – Here you can see the gap open and then the sell down. It would not be unrealistic to expect this drop to continue to the 10sma. It may just reverse higher, but I want to expect the pull back rather than the continuation higher.
SPX – So this is what that could look like if the selling continued Wednesday and even Thursday.
WTIC – Oil has had 2 strong days off of the lows and yesterday was a bit of a Doji, selling off as the day ended. Wednesday is oil inventory report. Last Wednesday we saw no reaction.
XOP – The Oil /Energy stocks were mixed. Some were still up 10-15%, others popped & dropped. That gave us a reversal candle and if Oil sells down, this could also drop to the 10 & 20 sma and still remain bullish. INDIVIDUAL STOCKS MAY ACT DIFFERENTLY.
GOLD – Gold rallied nicely but it also sold off at the end of the day. It is really hard to say how Gold will move going forward. It can climb up this upper trend line, or it can drop to the lower one.
GOLD – This is day 16, and the swings have been large, so it may just chop around. It has the appearance of a a false break out, but day 16 is still only about 1/2 way through a normal daily cycle, so I would say that anything can happen from here ( Higher or Choppy lower).
And as a result, GDX was still stopped at the resistance of the 50sma again. Volume was light, and it usually takes a good burst of volume to break through a resistance area, so Miners may pull back and try again as shown. The set up is bullish looking, it just needs more energy.
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ELYGF – Similar to GDX, there are Miners that have Bullish looking set ups but they are also at resistance. If they break out they can become a buy, and if they pull back they can be setting up for a push through later.
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The various market sectors can pull back for a day or two, but they don’t look bearish. This just looks like the normal wiggles that we get coming out of the lows. If we do see selling Wednesday or even Wednesday & Thursday – you may get opportunity to add to current positions or start a position in a stock that you wanted to trade. DID YOU KNOW THAT THE MARKETS ARE CLOSED FRIDAY? This may be something to keep in mind as we trade through Today and tomorrow. I will just discuss a few ideas below, and point out what you can look for in a stock that is pulling back.
Enjoy your Wednesday trading!
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~ALEX
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AMD – If I owned AMD, I would not have sold it on this reversal. The stock looks bullish and even though it reversed after breaking out, it could go either way from here. It may be an ‘add on the dip’ if it goes lower.
MU – I don’t like to see rising wedges, but Micron Tech does look bigger picture bullish. It reversed lower at resistance yesterday, but I’d keep an eye on this one too. These Semiconductor stocks affect SOXL, so SOXL may drop and become a buy opportunity in a day or 2 also.
YESTERDAY I WROTE: ZOOM VIDEO (ZM) reversed yesterday at the 50sma. This can be bought with a stop. A run back to the highs would be $110 to $160+. It may or may not continue to be choppy for a bit, since the stochastics is not oversold.
So it looks to be a bit choppy until that stochastics gets oversold, but the 50sma is still acting as support.
YESTERDAY I DISCUSSED SNAP – Snap can be bought with a stop under the recent lows.
SNAP – I noticed that many of these stocks are crawling along the 20sma ( red line). SNAP popped & reversed too, like many other stocks. It CAN just go higher, but if it drops further, it can be bought in this area Wednesday or Thursday.
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I also mentioned TWTR, UBER, WORK, CRWD, SQ, and others that remain bullishly set up despite a push higher & reversal
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I also discussed the large swings in the Oil / Energy stocks like APA, OKE, HAL, MRO, WTI, LPI, etc. This is an area where you want to be cautious because of the large swings Up or Down.
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APA – I own Apache and it popped 20% yesterday, but then sold off. It still closed up 11%, but as a possible reversal candle it may drop all the way to the 10 or 20sma. That may be an area to add or start a position if it does. I didn’t sell any, I just want to ride this out for bit.
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CLB – This is another Energy stock forming a base with a higher low. It ended the day with a reversal candle too, because itsold off a little from here. A drop to the red 20 sma may offer support and a buy if it reverses there.
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OKE – I own OKE and it was up nicely but also close only up roughly 4%. I like the set up and might add if I see a drop to the 20sma. I showed this yesterday pointing out that it has moved from $20 to $25 in one day, so this is NOT for everyone. Yesterdays trade moved from $26.45 to $24, so small positions alleviate the
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I traded TLRY and the gains were excellent, it ran from roughly $2.25 to $10. This is starting to show reliability at the 20sma, so it may be setting up to reverse and run again.
CGC – I am finding ghat many stocks ( not just in the MJ Sector) are being supported at the 20sma on dips. That is something that you can keep an eye on if stocks dip further too. The run of $$9 – $15 for CGC was an excellent percentage gainer. Another run should be too, but again, dips or swings are large and difficult to ride out.
