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Market at highs trending on upper Bollinger Bands mean that trends are strong but new entries are tough to find.  If you are riding a swing, fantastic, be patient.  If you are looking for a new entry and don’t want to chase up — well, that’s more difficult.   We looked through IBD50 scan in MarketSmith for new ideas and this is what we came up with:

Most stocks in the IBD 50 look fantastic, but they all look like continuation moves on high trends, not set-ups for new bases.  But we did find some potential candidates.   Let’s review:

At #13 we have KEM (Kemet- Electronic Parts) with a decent base at 27.  Under the 50sma right now so not much interest until it gets near 27 for potential breakout.

BZUN at IBD #38 (Baozun Inc – Computer Sftwr-Enterprise) in one of the hottest sectors of the year  up 47% YTD.  BZUN earnings in August disappointed but stock found support on the 200sma.  However, last week the descending 50sma acted as resistance — if it can get over and into the 58 range we’d get interested long.  No interest in buying weakness on this stock.

MA (Mastercard, #36) is one of our current swings we talked about in our previous post, long on the 206 breakout.  Great example of most of the stocks we are seeing right now:  gorgeous trend, but no entry right here without chasing.   However if you are already long like we are, well, then just trail stops and sit.

Financials are starting to look interesting and we have our eye on SIVB (#27 in IBD 50 list).   As you can see in the MarketSmith pattern recognition — we have a flat base here which breaks out near 334.

We traded NFLX last week (#14 on IBD list) on the 50sma breakout at 368 but we didn’t have enough cushion to swing it into the long weekend.   However, sometimes (actually quite often) it takes us two tries to get it right and NFLX stays on the list.   We are looking for a move away from that 50sma.

Add these IBD 50 ideas to your lists — getting to be a challenge out there finding new entries in this runaway tape.    See you on the streams. HCPG

#IBDPartner

In our trading accounts we don’t usually hold through earnings  (in contrast to our less-mentioned longer term accounts that are cost-averaging into ETFs and some go-to stocks such as AAPL GOOGL).

Some of the best moves can come immediately post earnings — they often are harder to catch but when you do they can be golden.

$NFLX is a great example this week with an open and rally from the 20sma weekly:

Fantastic hold on the 20sma weekly (345) but the short term 60min/9EMA (370s) has been the wall for now.

Two ways we trade around Earnings.  1)  Using MarketSmith scan we look for Earnings-Upcoming and strategize around potential trades at support/resistance levels.  This is a more difficult strategy — basically looking to act on the open post earnings.  Often lots of volatility and on average out of every 5 ideas probably only 1 triggers.

2) More preferable:  we look through the Earnings Reported section and look for potential patterns setting up a few days/week out post earnings.  We love trading stocks around a week out post-earnings knowing the numbers are already out, traders have taken positions, and patterns are setting up.

Hit Earnings-Reported on MarketSmith and sort by ESP last Reported

And of course every weekend we go through the IBD50 list to get a feel for growth and momentum in the tape.

There are some parts of trading that will get easier with time — honing in on risk management, entry/exit strategies, etc but the grind to find new candidates and new set-ups never ceases.  We like to take Saturdays off and look forward to looking through charts with fresh eyes on Sunday morning.   For us having at least one day off without any charts has been a good idea to a) not get burnt out b) get some distancing effect for objectivity.

See you on the streams! HCPG

#IBDPartner

“Computer Sftwr-Enterprse” : that’s the industry we are looking through in the MarketSmith scan.

Or we often reverse the process: after finding a stock we’re interested in we hit the “View Stocks in Industry” button and scroll through all the competitors.   As traders know some of the best trades you can get are sector trades.

For example we have been stalking WDAY which broke out yesterday —  once we enter the stock in MarketSmith screen we can see all the other stocks in the industry:

WDAY with the breakout of trend-line yesterday and follow through today:

BZUN held on the 50sma and now playing catch-up:

NTNX held weekly support but finding some resistance on daily here on the 20/50smas –  add to watch-list for next week.

ULTI has been on an amazing run — this is weekly chart:

Waiting for some type of secondary base before getting on this ride as it has run up from weekly 20sma with a V type move:

Also not a bad idea to go through the list and look for catch-up plays from lesser known companies — one thing we’ll do this weekend.

After a few short dips market is back at it flirting with highs — individual type moves though have been choppier than usual, very common in summer months.  We’re trading smaller and more defensive since we got back from vacation and waiting to see more consistent follow through — WDAY good action on that front.

See you on the streams.

#IBDPartner

We love buying dips, even more than buying breakouts, but never on broken trends.   We buy support on stocks that are pulling back to longer term uptrends (daily might be broken but weekly alive, kicking and ascending).

First we like to start out by going thru MarketSmith’s Industry performance scan to see what is doing well for the year — consider this a very early filter:

For the purpose of this post three sectors stand out:

Let’s start with the first: Internet-Retail up 36% including behemoths AMZN BABA:

AMZN clean trend on 20sma — 1565 zone corresponds to horizontal support and 20sma.   Add that to your radar.

BABA at support now — use this as a tell for buyer appetite.

No surprise to any trader we have Computer- Software Security up 29% including names such as PANW:

You can quickly see what kind of pattern we like — PANW also horizontal support and 20sma near 193 zone

And one of our favorite sectors for trading, Computer Software Enterprise up 27% including CRM NOW WDAY SHOP NTNX BZUN among others

CRM near 125 would get us interested if buyers show up:

SHOP, like BABA is at support right now — if no interest here it has juicier support near 120.

NTNX currently at support — watch to see if buyers show up for follow through up. If not next support not until 38-40 zone.

BZUN at primary support right now — if that doesn’t hold 40 is next major level.

Many momentum stocks are at primary support right now — we’ll be watching to see if buyers show up and if they do we’ll try to hitch a ride up.  If current support does not hold we’ll be more patient to see if next levels hold.  Current tape:  Summer chop, Smaller positions, Quick trades.

SPY currently trending in ‘ugly spot’ (between lower dev 1 and 2– as opposed to sweet spot upper dev 1 and 2).      Longer trends still healthy so this could very well be summer messiness.

Not reading too much into things as long as SPY holds 263.  That 50sma weekly now has held since 2016 and it would behoove the bulls to defend it for bull confidence.

See you on the streams! HCPG