Good morning!
We are starting a new week after an impressive late afternoon rally in the indices. The CPI numbers came in line and the first reaction was positive. Despite some zig-zag action in the first few hours of trading, both the $SPY and $QQQ finished at their highs carrying good momentum over the weekend. I managed to take advantage by buying $MSFT and $AAPL before the opening bell. They continue to remain the strongest tech stocks and are much easier to trade than $GOOGL or $AMZN which offer plenty of misdirection.
The most important event of the this week will be FED meeting on Wednesday. Jerome Powell will bring forth his plan to increase tapering. In addition we may find out when the first interest rate hikes will take place. A very hawkish FED might pull the rug from the recent rally as tech and growth stocks will be affected. On the other side of the coin, the financials will benefit should interest rates increase in the near future.
For today, with futures up, my initial focus will be on the re-opening names to see if they catch a bid. The Omicron news over the weekend had a more positive tone, as an Israeli study concluded that booster shots are extremely effective against this new variant. One good play in this re-opening arena might be $ABNB which managed a decent reversal and closed above $180. It has some room on the chart before it meets more resistance at $187.5. In addition, I am interested in starting a swing position in the semiconductors stocks, especially $AMD or $NVDA should they finally bottom. They continue to be for sale despite a decent rally in the overall market in the past week. $TSLA is in a similar situation, but the reversal on Friday made me take some stock overnight. See if it can hold above $1002 for a possible move above $1050 in the coming sessions.
$SPY chart
Impressive move in the overall market as it reclaimed $470. For today, it needs to hold above $467 in order to show some commitment. The next resistance level is the actual all time high around $473. Careful adding on strength or chasing extended names today.
https://www.tradingview.com/x/gZj4IA4F/
$ABNB chart
If re-opening names start to act better keep this name on your radar. On Friday it managed a decent reversal as it reclaimed Thursday’s low of $179. See if it offers some continuation today. The next big resistance area is $187.5. The quarterly results have been exceptional, so if Omicron proves to be a precursor to the end of the pandemic, this stock will most likely outperform the market.
https://www.tradingview.com/x/IJuq8xin/
$TSLA chart
$TSLA continues to be weaker than expected as it is usually leading the market. The selling pressure from Mr. Musk is definitely affecting the daily swings of this stock. However, on Friday it managed a strong reversal as it dipped to $980 before reclaiming $1002 for a move to $1020. This makes me more bullish going into today’s action. I am long the stock and some call options for later in the month. The fact that it managed to post a higher low compared to the one from the last week makes it more appealing from a technical perspective. $1002 needs to hold for confirmation.
https://www.tradingview.com/x/ikK9yJsd/
Our portfolio did very well last week despite some paper cuts on Thursday. I continue to ride the recent active sequence but prefer not to take too much size overnight. It seems that the market is at an inflection point before the FED meeting. I continue to hold a small biotech play, $MBIO which is starting to act better. It presents today at the ASH conference which may provide a good catalyst. Thank you for following us and for a more detailed analysis and our entire portfolio, please subscribe to Alex’s Morning Game Plan. For our trade alerts and news, follow us on our Twitter page!
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