We have three new activations over the past week, WMT, Bitcoin and Natural Gas Futures.
The latest weakness in equity markets has helped provide some profits for several short trade recommendations. If the market continues to rebound, some of these trades could reverse earlier gains, and even potentially get stopped out. We remind members to be cognizant of our target levels and take profits when they can, dependent upon risk tolerance levels.
Since last week’s update, MRK hit its first target, Bitcoin hit its first target, SPY hit its first target, AAPL hit its second target, and XLY hit its first target.
New Activations:
- Short WMT
- Short Bitcoin
- Short Natural Gas Futures
Previous Activations
- Long DIS
- Long MRK (Tgt 1 hit)
- Short NVDA
- Short XLRE (Tgt 1 hit)
- Short CRM (Tgt 1 hit)
- Short AAPL (Tgt 1 and 2 hit)
- Short IWM (Tgt 1 and 2 hit)
- Short SPY (Tgt 1 hit)
- Short NFLX (Tgt 1 hit)
- Long MCHI (Tgt 1 hit)
- Short XLY (Tgt 1 hit)
- Long Palladium
-The short set up was triggered on August 16 with a break below the trendline. Bitcoin had a sharp move lower since then, hitting the first target two days later, and falling below the 200-DMA.
-Price has seen slight move higher, along with equity markets the past few days, but the technical structure remains bearish.
-The short trade activated on August 16 with a fall below the trendline.
-Price briefly fell below the 50-DMA, but has climbed back above it recently with the latest rally in stocks.
-A break of the upward trendline from March would increase the likelihood that target 1 is hit.
-A break below the trendline yesterday (August 23) activated the short trade.
-Natural gas futures are hitting the first target today, with a continued move to the downside.
Long MRK (Tgt 1 Hit)
-The trade activated on August 11 with a move above the short-term trendline.
-Price has broken above both of the converging moving averages, hitting the first target which allows traders to take profits.
-The trade activated on August 10 with a large move above the trendline post earnings report.
-Unfortunately, price has reverted back below the trendline, and is hovering near the lows again.
-The trade activated on August 9 with a significant move below the upward trendline as well as the 50-DMA.
-NVDA reclaimed both the moving averages, and yesterday’s earnings report was better than expected as they beat Q2 earnings and raised forward guidance, which could lead to NVDA hitting the stop loss level today.
Short XLRE (Tgt 1 Hit)
-A break below the horizontal resistance line on August 3 activated the short trade.
-XLRE hit the first target Wednesday August 16, allowing traders to take some profits.
-XLRE briefly fell below the upward trendline, but rose back above it on August 23 after interest rates fell sharply on worse than expected Eurozone and US flash PMIs.
Short CRM (Tgt 1 Hit)
-The trade activated on August 2 with a break below the trendline starting in December of 2022.
-As we pointed out in our piece three weeks ago, we expected follow through towards the first target if CRM declined below the 50-DMA, which has played out.
-The hit of our first target provides an opportunity for traders to take some profits.
Short AAPL (Tgt 1 and 2 Hit)
-The trade was activated on August 2 with the break below the trendline that has held since March.
-While AAPL broke the upward trendline before their earnings release last week, the disappointing Q2 print catalyzed further losses for the largest stock in the S&P 500.
-AAPL hit the second target, but has bounced back above it after Tech and growth stocks have seen a rebound in the past few sessions.
Short IWM (Tgt 1 and 2 Hit)
-The trade was activated on August 2 with the break below the trendline from the beginning of July.
-IWM hit both the first and second targets, with a significant move lower on Wednesday August 16 allowing traders the option to record profits.
-IWM has now bounced off the 200-DMA after the latest rally in markets.
Short SPY (Tgt 1 Hit)
-The trade was activated on August 2 with the break below the trendline that has held since May.
-The downgrade of US debt by Fitch ratings spooked markets in the first week of August.
-SPY hit the first target as weakness continued, driven by mega cap tech. Price could move back above the 50-DMA today after NVDA’s strong earnings report.
Short NFLX (Tgt 1 hit)
-The break below the upward trendline on July 20 activated the short trade as NFLX had lackluster earnings results.
-NFLX hit the first target last week, falling slightly below the price channel, but has now bounced back above it.
Long MCHI (Tgt 1 Hit)
-Stimulus measures vowed by the Chinese government helped MCHI breakout above the trendline and activate the long trade on July 26.
-A surprise cut in interest rates this week did not help sentiment for Chinese stocks, with a continued move lower last week.
Short XLY (Tgt 1 Hit)
-XLY broke below the trendline which activated the short trade on July 20.
-Short-term head and shoulders top pattern led to downside, with price hitting target 1.
-Price has reversed higher with the latest rally in growth stocks.
-Palladium broke above its downward trendline on July 18, activating the trade on the long side.
-Palladium has moved back above the 50-DMA and is close to testing the top of the price channel.
These are great but it would be helpful to know where you are L/S from or say a red arrow pointing down for short and a green one pointing up on entry point. Thanks. On trial but very good.
does storage report that came out today on /NG change your conviction for those of us not in yet. It seems to have turned bullish with this report
Hi @Al Gallucci Thanks for your question. The basis for our trades are the technical setups, not changes in macro developments as that would be difficult to monitor; while we do take a look at potential macro catalysts that could come about in more thematic trades like certain ETFs or in commodities, we tend to adhere to the technicals given shorter term horizon of the trades. I hope that helps
The stop loss target on the long Disney Trade (DIS) shows as $84.07. The stock closed at $82.40 yesterday. What is the criteria for the stop loss (on breach of target, on daily/weekly close etc)?
Thanks.
@Haseeb Akram Hi – Thanks for your question. If a stop loss level is reached on our trade, the criteria is that it must close below that level (for a long trade like DIS). In this scenario, the trade is stopped out.
Thanks for the response and clarification.