Good morning,
Yesterday we had a strong morning in the indices as the $SPY posted a new all time high and the $QQQ reached their previous high. This early strength has been sold later in the day as we are overbought currently. $FB has been for sale as investors quickly dismissed a decent quarter by the social media stock. It is once again below all moving averages. It is extremely oversold and quite cheap at this levels, but from a technical perspective it offers no reason to be long it, except for a dead cat bounce.
$TSLA was impressive at it reached a new all time high at 1094. It retreated as well to 1001 before closing flat for the day. It needs a few days of digestion before a better set-up is created. For the coming sessions, holding 1001 will be important. The 3 tech giants that reported last night $GOOGL, $MSFT and $AMD posted solid reports and should be up today. Given the fact that we are at highs and overbought it will be hard for these names to have big moves. I continue to hold 305/315 calls for $MSFT which should be maxed out by Friday. For $GOOGL I have a spread 2900/3000 which is probably just a lotto currently. We have all seen $TSLA’s strength after the report so do not discount $GOOGL either. Late last night, I also bought some 125 $AMD calls, which will be interesting for the remainder of this week.
My focus today will be on the tech sector as we are approaching $AAPL and $AMZN earnings reports tomorrow night. Yesterday both showed impressive relative strength but were soon for sale. I will look to engage them for a quick day trade if they trigger any buy signal. I will watch $TSLA and $FB for possible entry points. $AMD, $MSFT and $GOOGL will be the main focus for investors in terms of sentiment in the tech arena. Keep an eye on $TWTR as well as it reported last night and said that its ad business is not affected by $AAPL’s privacy policy.
$TSLA chart
What a great trade this has been for my portfolio. I have been long the stock and call options until 2 days ago as I exited above 1000. For today, see if it can hold above 1000 for a possible long swing trade. If it breaks below it, I have some 1000/980 bear puts as it is extremely extended.
https://www.tradingview.com/x/2RdsO3vm/
$QQQ chart
The tech sector made a double top yesterday around 382. I am cautious going into today as it needs to rebuild before the next leg higher. A lot will depend on the investors reception of $MSFT, $GOOGL and $AMD today. With $AAPL and $AMZN reporting Thursday night expect more volatility before the dust settles. We are a bit extended from the moving averages currently so I will be tactical going into today’s tape. 377.91 is support with the 8EMA all the way down at 374.4. The all time high stands at 382.78
https://www.tradingview.com/x/fLmKaZPo/
$MBIO chart
I have been long this small spec bio through thick and thin. This is the only stock that I accumulate on weakness irrespective of the technicals, as I truly believe it to be a revolutionary company in this sector. Yesterday, it gave me a lot of reasons to smile as it quickly rebounded 14% from the bottom of its channel. Keep in mind that most analysts that cover this $2 stock have price targets of 10+. Its collaboration with Mayo Clinic should prove to be a good catalyst for long term. 2.50 is the next big resistance area.
https://www.tradingview.com/x/tdy4DPBe/
For today, I will continue to manage my calls that I still own for earnings and will probably stay out of the way if we have an inside type of day. I have low expectations going into today’s action with futures flat and European and Asian markets down. I will look for pockets of relative strength early on to see if there are any good setups. Keep in mind that cash is a position as well until a better setup is confirmed.
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