I won’t go into a full top-down review here as there are others who do that far better than me, but I want to just briefly touch on the $SPY as from where I stand the pullback we saw in the S&P this week looked to be well contained.
So far it looks as if we’re just testing that previous breakout level inbetween the 20 and 50-day MA’s. I actually welcome these choppy overlapping moves so typical of countertrends, because they provide a good opportunity to more readily identify the leaders and laggards amongst individual stocks.
Last week I highlighted the break we saw in $PCLN which triggered an exit for Monday’s open.
There is always a possibility when exiting close to a perceived area of support that a stock can bounce back and compound your frustration, but $PCLN had clearly been acting poorly, and after a brief rally Monday continued its path lower throughout the week.
It was a similar story with $IPG which had been languishing for several weeks.
This was a signal harder to take than most for a couple of reasons. First, it was a marginal break of a trailing stop at a previous support level, the kind that can keep you in as you repeatedly give it another chance, and second, it’s well known that $IPG has been the subject of interest to activist hedge fund managers and has been talked of as a takeover target. This last factor is a double-edged sword, as whilst it’s tempting to think there is increased upside and reduced risk involved, the danger is it can influence you to deviate from your trading plan. At Friday’s open I took the exit Thursday’s marginal break of the trailing stop had triggered, and by the end of the day was very grateful I had. That opening print proved to be the high of the day (the exit is shown slightly above to reflect the 9.5c dividend from 8/28) and it slid lower throughout the session taking out levels from early July.
The only new entry during the week was in $NKE.
This looks good on multiple timeframes and had appeared on our watchlist for quite a while as it neared a long-term breakout level. The subsequent tight consolidation is a positive development, and a resumption higher from here may even enable the stop to be moved up from its initial level up towards the 50-day.
Of our existing holdings $MSFT was again a highlight moving to fresh 14-yr highs.
$MAR continued its remarkable climb and saw its trailing stop move up to the July highs just below the 50-day.
$AAPL was another obvious standout and it will be interesting to see how it acts this week as the dust settles around its product releases. Despite the noise generated that day, the much vaunted ‘sell-the-news’ action never materialized finishing more or less unchanged on the day and rallying for the rest of the week. This is where it now gets interesting. With a new high we will have another higher low in place and an obvious next trailing stop level. With a new low we’ll have lower highs, lower lows, a break of the 50-day, and will quite possibly trigger an exit.
Other existing positions are $AA, $FISV, $DIS, $ATVI, $GILD, $DPS, $HPQ, $LMT, $TSLA, $JCP, $HD, $BRK_B.
There weren’t many names added to the watchlist this week. I have a total of 20 that I’m watching, more than the total number of positions I have, so for me to make room for any of them they really need to be special.
$DTV continues to set up nicely:-
$JACK broke out this week:-
$INTC is holding a remarkably tight range:-
$NFLX looks similar:-
Solar is looking interesting again. $SCTY is worth considering, currently though I prefer the look of $FSLR:-