Don’t forget, IPOs will have wide swings so IBD recommends smaller positions so you don’t get shaken out so fast.
Other stocks:
Earnings this week: AMZN, MSFT, AAPL, META, ANET, PYPL, AMD, MA, WING
○ Webby’s ETF check…You can go to the sectors webpage, paste ETF contents into Excel then paste into MarketSurge and go through each one.
||○ XLE: RS is moving up, so might want to check the stocks in this ETF/Sector for candidates.|
||○ OIH is looking interesting, had a nice upside reversal.|
||○ XLV nice RS line moving up the place to fish in.|
||○ XLU: Mixed bag with AI-related utils and regular utils.|
||○ COST: Bill would always think about where a stock should go to during a correction (in the stock). For Costco it could be the $787 breakout price or the nice round number of $800. Webby thinks it then could round out and be ready in 3-4 weeks.|
||○ XLK: RS in a downtrend underneath moving averages, avoid|
||○ XLF is the area to fish in BRKB has a natural pull back that might be ready to bounce up.|
||○ Homework: scan through all banks and S&Ls above $10 and above 50 and 200dma. A lot are extended|
||○ XLRE: RS moving up, price is putting on a handle and breaking the downtrend of the handle is a place to buy.|
||○ XLB: RS shooting up. Chart is a double bottom.|
||○ XLI also has nice move up in RS.|
||○ XLC: Avoid|
||○ 3M: each of the last 3 bases has become more shallow. Webby says this indicates people are becoming more comfortable with the stock. Lots of 3-week tight patterns showing accumulation. Then a blast out of the base. This is a good trend to look for in other stocks too. Can’t buy 3M now, but will be watching for a tight flag or even better, an upside reversal. Webby probably would not buy it for a couple of weeks.|
||○ GE: ab out a year ago, GE did what 3M is doing now (fixing the company). Last 2 flat bases have been very tight. Webby still watching to get back into this.|
||○ NOW: put on swing trader yesterday, but could certainly come back down to $800 or even to the low of the gap up day and that would be normal and natural. But, bases have been getting deeper instead of more shallow. Also, the weekly chart shows this most recent base was flawed - too many red bars. Group (software) is weak, but sales growth remains strong.
○ IBP: double bottom with a little pause before the breakout. Webby plans to review this over weekend, but is worried that earnings are in 6 days. Advises to look at other stocks in the group that have already had earnings. CHDN: Webby does not like Thursday’s action (failed breakout).
My third buy on Friday was $BKR (Baker Hughes) Oil Services showing good strength. Here are my notes to self
7/26/24: bought on breakout with +69% vol, RS only 53 but rising fast. EPS96, A, B, A+, Comp98. Bought 1/6 in afternoon and another 1/6 near close as it remained strong. IBD says 40-60% exposure, Naz below 50dma, SPY just above 50dma. IWM very strong. Stage 1 base. Right side was Ziggy-zaggy, so not a straight up wedge – that is, weak holders might be shaken out. Decreasing fund ownership over last 2 quarters.
Howmet $HWM reported great earnings and went up 13%, so I think that is dragging ERJ up. ERJ earnings in 9 days. It is now back in the buy zone, but sometimes IBD says the buy point is no longer valid if it failed all the way down to 7-8% below pivot. There is also a likely pivot at the recent high of $31.12. Fund ownership has been steadily growing, though still small. EPS estimates for this coming report seem high at 316%
$HEI is another in the aerospace group performing well, thus the high group ranking of 24 of 197. I may add a little, not sure yet. I have an old position with enough gains to protect me through earnings.
Yup, not a good sign, so good decision. I need to cut back to raise cash.
Homework from today’s video: check out the tight pattern in PGR and TXRH. Keep watching them through this downtrend and see how well a pattern like that holds up. Will be a good memory to have.
Okay, in the interest of learning, let me throw two-cents worth in concerning the chart. Understand, this is just thoughts. Curious to see how right or wrong it may pan out to be. Best way to learn. If I’m intruding on your thread, let me know.
Clearly broke out of a channel, but not exploding just holding their own. But PPO turning up and very interesting in it’s bouncing off the “50” on the RSI, which seems to be it’s happy place.
Nice bullish marubozu (A) but followed by indecision with a doji and spinning top (B). Todays’s Belt-hold marubozu is strong (C). Bit of a wick pulling back, but overall great given the overall market. Prior volumes moderate to small but with a large increase today.
As the saying goes, amateurs buy in the morning and pro’s buy in the afternoon:
Overall, a strong candle formation in the setting of a declining/volatile market. Full disclosure is that while I would buy some for the chance, I’m on the road to take are of grandkids. I can’t monitor such a position and that is what I would normally do. The key is monitoring to minimize losses. Luck to all!
If you have not read the Dancing Woo-Li Masters, I highly recommend it. It provides a nice prospective of how the East and the West look at physics and can say the same thing, but in very different ways. I really loved it.
Anyway, seems like that is going on here a bit. Candle-omics and IBD chartism are probably coming to the same conclusion with different words that seem to oppose but don’t.
I had drawn the orange dashed lines to show the top of the down trend and then longer term horizonal resistance. Big upward reversal off a previous day’s downside reversal is a powerful action. Shooting the price above the 50dma was the icing on the cake. A bunch of inside days consolidated it into a spring ready to take off, which happened Tuesday on volume 77% higher than average. That was confirmed today on vol 16% above average. Blue vol bars vs red show accumulation by the big boys.
Nvda is forming a base on the weekly charts but it’s a stage 4 base so chances of failing are higher. After reading both MSFT and META CC though this is the highest confidence stock I see out there. I added more today around $107.00
But also notice that it is below the 10 week moving average (on the weekly). I finished below it last week and if it does the same tomorrow, that is a sign of weakness you don’t want to see in a Stage 4 base. But of course, no IBD trader is going to buy it now, so nothing wrong with watching and waiting for it to get strong. Wouldn’t it be painfully funny if the PCE numbers Friday spark another rally and it jumps up again? It just have no faith in short term moves at this point.
I could see someone buying it yesterday Pete, for an early buy point, after it went above that trendline I have drawn. But of course today they would have been out. I think NVDA is going to have another great quarter after reading Meta and MSFT cc.
Listening to Weinstein he said we should be looking for stage 1 companies. I have noticed that the stage 1’s have been mostly, largely breaking out of their bases without coming back. Might be a good tip.
I posted some market details on the “Market Health Thread”. Summary and more
This could be an upside reversal that marks the bottom
This could be due to the unwinding of the Yen/Tech carry trade, and therefore not hugely dangerous.
IBD would say to wait for a follow-though-day before committing money.
Webby loves upside reversals because the provide a clear stop loss point at the low of the reversal.
IBD and Webby would want the upside reversal to close above 40% of the daily true range (from yesterday’s close to today’s low).
Webby would probably swing trade off that, but not position trade.
IBD would say to start building your list now. Start with high RS stocks that withstood this downturn better than other stocks.
I sold a number of IBD positions Friday, but none today. As usual, I was off to hot yoga and this time I benefited from not being able to panic and capitulate at the open. My remaining positions are doing ok and none have hit the 7-8% loss range.
CARR, NVDA, MOGA are below the 50dma and would be cut first.
SPOT came back above the 50dma
AEM bounced off the 50dma, as did TOL.
GVA was the best, it tested the 21dma and is now only down from yesterday’s (positive) close by 1%. Yesterday it closed at a multi-year high. That is one I might add to first.
This has to be on your watch list. The day before Earnings, MELI tested the 200dma and sat on it. Earnings caused a large gap up rebound that took it above the 50dma and 21dma. RS is shooting straight up. Today, it went back and tested the 50dma but then closed down just 0.01%. That is a good reversal of a key trend line. Normally, I would jump on this, but we are in a correction and I need to be cautious.
Edit:
Homebuilders are strong and holding up ok. See PHM, TOL, XHB.
HWM (Howmet Aerospace)had strong earnings and a strong breakout a few days ago, but it is now back to the buy point. Keep this on your IBD watchlist for when we get a market FTD.
Right now my IBD account is 1% above the S&P for the year. All that work just to break even? If I had employed better sell rules, I would be ahead as I am now. I am currently 58% cash, so will probably outperform S&P on down days and underperform on up days. The IBD advice is 0-20% exposure, so I should sell some stuff if we get a bounce, especially if we get rejected by the 50dma for the Naz.
I will try to be disciplined and wait for an FTD.
I will post some charts with my mistakes for the benefit of others.
I was unable to wait, I bought a 1/6 position in MELI and will watch closely for signs of weakness and a near-term FTD. I was already above the 0-20% suggested exposure level, so my probabilities of loss are higher than they should be. I just don’t feel like parting with my remaining IBD stocks. Fatal flaw?
Yesterday was a good upside reversal in the markets, but not good enough to be the first day of an “attempted rally”, that happened today. Attempted rally just means a low price was established and we are waiting for and FTD. A lower price would restart the wait for a new first rally day.
I also added a bit to AEM, which is providing defensive strength. Nice test and rebound from 50dma yesterday and very good follow through today.
