Good morning and happy week!
Our patience has paid off and the bull market has finally opened. I got aggressive Friday when I saw the $SPY and $QQQ so strong, and I put my capital at work. The levels I wrote about in the previous Daily Charts were reached and overcome, therefore I used my buying power for cash flow. I kept adding through levels and trimmed into strength. On Friday afternoon finally I got out of 90% my positions in order to book profits and left trailers. Why did I do that when the indices are above all their moving averages? When we have such an aggressive move to the upside we usually require a day or two for digestion and for the moving averages to adjust. I kept my call options for earnings to collect premium, and I left small positions to which I plan to add on dips.
The gentle giant finally woke up Friday mid-day, and it seemed to surprise everyone. When using technical analysis though, there is no need to be fearful. I did not get fully onboard at the first signs, I just added a small position to track it. When it went above and stayed above all its moving averages I added aggressively and trimmed into strength. I also sold my conservative call options for earnings since they doubled in value. After this strong move I bought cheaper and more kind of lotto call options for earnings and trimmed 90% of my stock. The win in $AMZN made my day and decided to keep profits. Technically you could have stayed with a larger portion of stock, but I believe we’ll have a digestion day and I plan to take advantage of it by buying into weakness. Watch $3363 as this is a big level above which it should stay if there is muscle memory for Friday’s move. For continuation it should get to $3429 and continue from there.
Tesla has been my second winner on Friday, and when I saw it stayed above the $821 I added to my position and trimmed into strength. I used the same strategy with my call options, that I did with Amazon, and I booked profits and bought some lottos for earnings. I doubled my money for my call options and created massive cash flow, therefore I also plan buying $TSLA into weakness, but maybe not today. It is extremely extended and I do not want to give back Friday’s profits. I will wait patiently and see what kind of swings it will have today. In order for $TSLA to be strong it should stay above $821 and maybe push towards $844.82, but a day or two between these levels is healthy.
$AAPL was not that impressive on Friday but it created a nice profit because I had it in my portfolio since Thursday and I trimmed into strength and finally exited the stock at the end of the day. I did that because today we have an event in $AAPL and usually we see a sell-off in this stock, even if there announcements are positive, therefore I plan on buying it back after the event. Another reason for letting this stock go was that it did not manage to get above all of its moving averages, when the market was so strong.
If you did not take advantage of the two big moves up Thursday and Friday don’t have FOMO today because it will most probably be a digestion day. After two gap ups and macro news that China’s GDP did not increase at the expected pace the trend may be against you today. You can try some red to green moves today but don’t become too aggressive because it can be a carousel type of move day, in which you may give back gains, for no good reason. I will take today’s tape slowly, and wait for market discovery.