Good morning everyone, and welcome to all who joined over the weekend!
We wanted to make this week’s newsletter available to everyone because we feel it is an important one. U.S. equity markets are in uncharted territory, and most have no clue where we are headed next. This is where experience and attention to detail are required. If you have not already signed up, for $9 a month, you should strongly consider it.
The S&P 500 continues to climb to new highs, but market internals are not in sync. We are starting to see higher volumes at the high with very little follow-through to accompany it. This doesn’t always mean we hit a top, but it is definitely an indication of one. As mentioned last week, volumes are higher on down days than on strong bullish days, a signal that the buying is hitting exhaustion and sellers are stepping up. Again, this doesn’t mean markets will collapse, but it certainly means that we must reduce share size and book quicker profits. Our team will continue to observe whether or not the internals improve to align with price action or if they deteriorate further. As new technical developments arise, we will keep you updated. Make sure you are subscribed, as you do not want to miss what could be a massive move!
Last week’s sector performance
AWK
In last week’s sector performance, you will note that the utilities sector was the best performing sector. After a deeper dive, we noticed that American Water Works was lagging against its peers but held support very well. We are looking for this one to play catch-up and bounce. We like this one as long as it holds above support. Our initial target is $127.50, followed by $132.
MPC
With the energy sector coming in close second to utilities, we want to make sure we are participating here as well. Marathon Petroleum Corp. saw a nice pause to start the week and then had a strong bullish move on Thursday with more than double its average volume. This type of price action typically leads to a continued move higher, and we want in. Our entry price is set to $201.75, and our stop loss is just below $195. Our initial target is $207.
COF
Capital One Financial has been ripping these past two weeks, and with the previous high at $178, there is still plenty of room to go. We plan to buy and hold this one above $149. For swing traders looking to book a quick profit, $160 is the first exit point. Use stop losses to lock in gains!
FSLR
The solar space has been lagging for several months but appears to have caught a spark. In the picture below, you will notice a huge volume spike on Wednesday in conjunction with a large bullish candle. We are looking for this one to hold above $160 and push toward the $180 level.
LEN
Real estate builders are seeing some buying pressure with talk of the Federal Reserve starting to cut rates this year. Lennar Corp triggered our buy alert last week as it broke above resistance. You can see that it was struggling to get above $168 for the past few weeks, but not only did it break higher, it followed through and closed near the high of the day Thursday. Our entry price is set at $172. If our entry price triggers, we will place a stop loss just below $168 and look for a move to $181.
Market News
Stock futures rise as Wall Street readies for the start of the second quarter: Live updates
Oil Steadies After Quarterly Surge With Chinese Demand in Focus
The home insurance market is crumbling. These owners are paying the price
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