Traders,
In this update, I will share several of my top ideas for the upcoming week, as I did last week.
As an exercise, I urge you to review last week’s action and my pre-determined plans shared in the watchlist to study the action and setups and better understand my thought process and why several names from the watchlist experienced the follow-through they did. I do this live once a week, in detail, with members in Inside Access.
Now, stick around as I share the ‘why’ behind the potential trades for the upcoming week and my ideal entry and exit scenarios and targets.
So, let’s get right into it.
Follow-Through in MU
The Idea: After a powerful earnings gap, shares of Micron have pulled back steadily toward its rising 200-day SMA. Within the pullback, a potential downtrend flag resistance develops as volume decreases, creating an opportunity for a second-leg price and volume breakout. Ideally, this continues to pull back and experience further consolidation for a day or two, closer to its 200-day SMA, before experiencing leg two higher.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
The Plan: I’m monitoring price and volume with two potential entry scenarios in mind. First, a wash/pullback toward its rising 200-day SMA and VWAP reclaim, along with price back in the range over $107, would be enough to get me long for a multi-day swing trade with a stop at the LOD.
Secondly, A break and hold above $108 with elevated RVOL and relative strength at the beginning of the week. If MU bases above $108, with favorable market internals and relative strength, I’ll initiate a long versus the previous higher low on the 5-min, as I wouldn’t want to see the stock enter the low-end of the range once entered. 1 ATR target for profit target 1, $112 – $113/ 100-day SMA. After that, trailing with higher lows on the 5-minute timeframe and using my exit strategy discussed in Inside Access weekly.
Higher-Low Breakout in MSFT
The Idea: Measured pullback, higher-low developing on the daily in MSFT, near converging SMAs. Targeting a hold above the 5-day, near the flag’s resistance, and trend change. It most likely needs several days to develop and conform to the setup.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
The Plan: Patiently monitor MSFT as the setup develops further. I will also look for clues about the stock, ideally becoming a relative strength player in the short term after underperforming in recent weeks. Suppose MSFT breaks above the low $430s and begins to intraday trend with solid internals. In that case, I will initiate a long swing versus the day low, with the $440 zone as the target one for profit, and after that trail my stop using higher highs and higher low strategy for trail and profit taking.
Consolidation Breakout in PCG
The Idea and Plan: Contracting range and volume in PCG as the consolidation builds near its 52-week high. This is a straightforward setup, looking for volume and price burst above $20 to confirm a breakout.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
I would look to enter long above $20 after volume and price confirm a breakout, with a stop below the previous higher low on the 5-min. Thereafter, I will target a move to the 52-week high as my main target, with a trail left on to let the position ride.
Pullback in China Names (BABA / FXI / PDD, etc.)
The Plan and Idea: Bigger picture; I am looking for a significant pullback and consolidation to enter long. However, in the near term, several Chinese names will be in overbought territory and susceptible to a pullback.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Therefore, with more of an intraday mindset, I am looking for either a push and fail in BABA, for example, above Friday’s high, or a 2-day VWAP to act as resistance and fail for short versus the HOD, targeting an intraday move back toward Day 1 and Thursday’s support near $102.
Consolidation Breakout in LUNR
The Idea and Plan: Bearish sentiment remains firm, with an elevated short interest. The stock has held up well after providing a solid short opportunity last week, as mentioned in the watchlist. This action has setup a potential liquidity trap and short squeeze above recent highs.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Keeping it simple, I’m looking for the price to base above $9 previous resistance and build. I would look for a starter position above $9 after a consolidation period, with a stop below the key area. I’m targeting follow-through above and an add, $9.5, for a breakout andsqueeze out over the highs.
Small-Cap Stocks on Watch
For both names below, I would not look to short if they consolidate near highs for multiple days, as this could setup a potential liquidity trap and squeeze higher.
CNEY: Targteting a push toward $1.10 and fail for a short.
DUO: Targeting a push toward $1.4 – $1.5 and immediate stuff for a short versus the HOD and move back sub $1.
