Navigating Friday's Ramp | Trading NVDA, AAPL, F

Can the bulls break through on the upside?

• NYSE Breadth: 70.9% Upside Volume 

• NASDAQ Breadth:  80.1% Upside Volume (!)

Game Plan

Our favorite group lately — energy — will start reporting earnings in earnest this week, with XOM kicking things off on Tuesday before the open. I won’t carry a long position into the report (just as a heads up). 

However, how this group behaves will be important to watch, as energy is really the only sector that’s been holding up this year and it’s not even close. 

After Friday’s explosive rally, we really need to see how the market is going to handle the month-end gains and see how it trades today. I never like to be in a rush on a Monday morning. 

It almost feels like a gap in either direction with “revert” back towards Friday’s close and then we’ll have to go from there. If that’s the case, let’s see if it reverses/rebounds or if there is a follow-through on the fade. 

S&P 500

SPY Daily

There is still a path up to $450 in the SPY, but it will need to clear last week’s high near $444, as well as the 10-day and 200-day moving averages. Above $450 and one can make a case for $457. 

On the downside, the $428 to $430 zone proved to be solid support for the index. $440 to $442 remains resistance until proven otherwise. 

For now, that is the range we’re in. 

Nasdaq

NQ Futures Daily

13,800 to 14,000 proved to be solid support in the NQ last week. No matter how many times this area was tested, it continued to hold. That has to give bulls some sort of confidence, no? 

At least we have a line in the sand. 

In the short-term, let’s see if we can hold the Q4 low. If we can’t, the NQ may see another test of the 14,000 area (or lower). Above this level keeps last week’s high and the declining 10-day moving average in play. 

If the NQ can clear both measures, it opens the door to the 200-day moving average and the 15K level. 

(The same logic can be applied to the QQQ). 

Individual Stocks — Watching AAPL, NVDA, F

We ended up getting an “easy” trade in TSLA on Friday, with the reversal back up through Thursday’s post-earnings low. Bulls could have either waited for the trigger at $829 or they could have taken it earlier based on the 15-minute reversal in the opening of the session. 

I like the latter. While it’s more nimble, the R/R tends to be better. And even though I trade those setups with smaller position size (because it may need two or three attempts to get going), the payoff tends to be better when you know what stocks to focus on — which is what this newsletter (and specifically this section) is all about. 

So what’s left now?

AAPL