Good morning!
I hope you enjoyed the weekend with family and friends and took time to disconnect from the world of trading in order to start this week with a fresh mind. We had a productive week and it has paid off paying attention to patterns. I entered the weekend quite light in order to protect my gains, even if historically this should be a green week for the indices, preceding Thanks Giving. However, some names in the tech sector are extended and I already exited my big positions leaving just trailers. $AAPL has been a rockstar, continually reaching new highs through Friday’s tape. $MSFT has also had a strong day, but other tech giants like $GOOGL and $AMZN retreated towards the afternoon. This specific action has made me weary and determined me to be more cautious with regards to the beginning of this week. The same can be said by the S&P500, as the $SPY made a new all time high and then finished red. The $IWM looks to be in trouble, as on Friday it broke under the 21 day EMA and stayed there. This weak action in the small caps, the $SPY and the banking sector should be a warning sign to be tactical and follow trends, do not get overly bullish just because some stocks are reaching highs, because we may encounter some turbulence and there is no need to give back last week’s gains in an air pocket.
$AAPL Chart
This stock made an amazing reversal in the past week and reached dizzying highs, and we were there to milk it. However now it is extended and I have no more stock left, just some call options, in case it decides to stay here into the end of this week. It needs to digest above $157.26 in order to prove this move has legs. Don’t overtrade this stock, and don’t chase it as it has its 8 day EMA all the way down to $154.16.
https://www.tradingview.com/x/d1HnotNe/
$TSLA Chart
As you all know by now this is my favorite stock to trade and on Friday it has been sleeping until the afternoon. When the negative news about Rivian came out it woke up and it pushed above the $1119 level all the way up to $1138. I took advantage of this move for cash flow and I exited most of my stock here. I kept my call options for this week and for December but I decided to keep my portfolio light into the weekend due to the move in the $SPY. If you are still involved in common stock trim into strength and be careful chasing it until you see it can hold its position above the 8 day EMA of $1090. I had no big reason to exit the stock, it was more like a personal choice, and I can always re-enter if it proves to be strong. It is not extended and therefore it can be bought, but I would like it to hold above $1119 and to push towards $1174 in order to come back to its highs.
https://www.tradingview.com/x/HmtYLr4X/
$F Chart
This name looks like it is in a very tight formation, ready to break out of the pennant. It needs to hold above $18.83 and to break above $20.26 to show it has strength for a leg higher. Its 52 week high is at $20.51 and it is not far from there. This is a lower risk kind of stock with more modest moves, therefore it is less risky than its ‘sister’ $TSLA or other EV names. Let it go if it goes under $18.83 as it means it has lost momentum, but add above $20.26 and trim towards the highs.
https://www.tradingview.com/x/Fy5wymUX/
As I am writing this piece the $QQQ, the $SPY and the $IWM are green and strong but this is early pre-market action. See if they hold onto momentum and wait for market discovery after the market opens, as a green to red kind of action can be imminent. It is way easier for a trader in a red-to-green kind of move rather than the opposite. Don’t chase things because you have FOMO, as there is always an opportunity for you to discover. Take this week slowly as it will be low volume towards the end, with Thursday off, so keep onto your gains and be tactical rather than aggressive.
Have a good week!
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