We’re seeing a setup in the indexes to retest their falling 21EMAs, or reversion to the mean. If that happens, there are some stocks we want to focus on like LEN, LULU, and UPWK that have strong setups to play higher.
The market indexes have patterns to revert and retest the means, 21 daily EMAs, but the backdrop is not all rosy. There are some yellow flags in the market in some very important areas, but there are also signs of higher prices first. Let’s dive in and review both the good and the questionable as well as some stocks with setups till week’s end.
Relative outperformance is the watchlist I rely on most. However, in a sea of indices, sectors, and stocks that are transitioning out of the trend and into chop, that watchlist is a shorter one. Here’s what is still maintaining strength in the NASDAQ.
This morning the NQ was in focus for entries after the gap — I explain what I look for in a “gap” — and now we have a minor low breakout on the daily NQ and the implications are best for already strong NQ stocks and sectors.
Monday got off to a weak start, directly in line with what we covered last week and how we might trade after the witching expiration. Now we get to lay the plan from here and some of the best charts for this week’s trades.
There’s a bull market somewhere, and in tonight’s free video we’re looking at the stocks that may fit the bill if you’re looking for something to buy.
What are the relative outperformers within the YM/DIA, IYT, and XLI and which do we trade for “buy the dip” trend follows and which are oversold buy candidates?
With copper, transports, and industrials in “double green” markets, the YM continues to be a reliable relative outperformer.
