The Weekly Trade Plan: Top Stock Ideas & In-Depth Execution Strategy – Week of August 12, 2024

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Merchants,

It’s a novel and thrilling buying and selling atmosphere, and as all the time, I stay up for sharing my ideas and buying and selling plans with you.

Vital Changes and Normal Market Ideas

Final week was per week for the books relating to the market’s volatility, sheer vary, and worth motion, particularly a number of main mega-cap shares and ETFs. Concerning mindset and changes, it stays a buying and selling atmosphere versus swing, for my part.

Certain, the bounce off the panic lows on Monday labored properly, however the a number of 1 – 2% declines alongside the best way up make swing positions more and more tough within the atmosphere in comparison with intraday momentum buying and selling.

I’ll intently monitor the general market, SPY, and QQQs this week as we come into a possible resistance band. For SPY, that space of attainable resistance that would market a decrease excessive and downtrend continuation is $537 – $540.

*Please word that the costs and different statistics on this web page are hypothetical, and don’t replicate the influence, if any, of sure market elements resembling liquidity, slippage and commissions.

For tech and innovation (QQQ), which has led the best way on the best way down, and now, with this bounce, on the best way up, that band matches as much as its 100-day, close to $456. As the worth edges nearer to this potential zone of resistance out there, I’ll pay shut consideration to market internals and worth motion for indicators of a attainable turning level and skewed R: R alternative for momentum shorts.

If that state of affairs begins to type, a number of avenues exist to precise it. For instance, not solely might I be concerned in main market ETFs, however I would think about figuring out comparatively weak names for momentum trades on the brief aspect.

For instance, aside from the plain go-to names and ETFs, ARKK is one other fascinating choice proper now for the above concept, given the bounce into a major zone of potential resistance from its day by day chart. If the market stalls after which turns decrease, ARKK, which has traded again right into a hefty stage of potential resistance close to $42, might supply skewed R: R.

The alternative may occur as properly. That’s to say, the market may digest the current week’s motion, with volatility subsiding, have a slight pullback, and proper additional time by going sideways. If that happens, I might search for beaten-down names buying and selling at essential inflection factors, providing the potential for fast directional strikes if internals start to enhance.

For instance, a momentum breakout in MSFT: Contracting flag close to the resistance of its steep downtrend, providing the potential for momentum longs or shorts relying available on the market’s total course. If the market stabilizes and finds increased footing, MSFT’s bounce might develop legs, providing a clear momentum entry above $410.

In such a case, I might be lengthy on the breakout of $410, with a cease on the LOD, scaling out of the place on prolonged increased highs on the 5-minute timeframe whereas trailing my cease utilizing increased lows. An identical setup exists in TSLA, consolidating between a flattening 200-day and 100-day SMA, making it a candidate for a momentum breakout commerce in both course.

Further Concepts Uncorrelated to the General Market:

HUGE Pop into Resistance to Brief: Superior quantity and mover on Friday, contemplating its % transfer. I’ll simply have some alerts set within the identify in case quantity comes again in and drives it again towards $0.30 + for a possible failed follow-through setup and brief vs. the excessive for a transfer again towards $0.20—teenagers.

BYND Pops to Brief: On Friday, as soon as the worth turned at $9 for a roundtrip brief, just like CHWY, It offered a superb brief alternative. It’s nice to see a number of individuals on the desk do properly right here. It’s a protracted shot, however I’ll have alerts set $7+ for any secondary transfer off choices exercise for a re-do.