Trimming Into Strength | Trading QQQ, NVDA, PYPL
the NQ is up ~11% from Friday's low.
Technical Edge
NYSE Breadth: 79.2% Upside Volume
NASDAQ Breadth: 77.7% Upside Volume
We are seeing a powerful reaction to Google and AMD’s earnings, which should help drive FAANG, tech and the semiconductor stocks higher at the open. If they maintain that momentum through the afternoon, that will be damn impressive.
There’s nothing wrong with trimming a bit on the trades and looking for some digestion. On this morning’s premarket high, the Nasdaq futures are up more than 1,400 points from Friday’s low, good for a 10.4% rally.
Even with some powerful breadth, that may still warrant a rest.
Game Plan
“That said, it may simply pay to be bullish until the rally runs out of steam.”
That was from yesterday and I think we have laid out a pretty good roadmap on the S&P lately.
Now into our second tier of upside targets, I am getting a little more defensive, although the bulls have done an incredible job the last three days — or last 2.5 days, if you want to get technical.
S&P 500
Is this chart burned into your memory yet? It should be. We have looked at — essentially — the same one for a week now, since the Fed day on Wednesday.
Yesterday morning we dipped off the gap-up open after tagging the Dec. lows and 50% retracement. We said that’s how SPY gets to $450, then:
If it can reclaim this area, the plan is the same from yesterday: It opens the door to the $457-ish area. There the SPY finds the daily VWAP and declining 21-day moving average, as well as the 61.8% retracement.
So now what?
I think it would be incredibly healthy to digest a bit, perhaps pulling back to the 10-day and/or 200-day moving averages. But that doesn’t mean it will happen. I’m trimming into this morning’s rally and will re-evaluate.
Individual Stocks & Go-To Watchlist — QQQ, NVDA, ABBV, PYPL
Some really nice trades came out of yesterday. BRK.B went 2x daily-up, even if it was only good for a few bucks. TD went weekly up and is moving higher this morning. Today, hopefully we can pull out a few more winners.
NVDA
“Weekly-up over ~$240.60 and over the 10-day could net us ~$20 a share in a hurry, up to $260.”
Up 5% or so in the pre-market now has us trading $260. Because of that, a trim is warranted (especially into strength), but AMD is up 12% in the pre-market. If it doesn’t fade, we could see more upside in NVDA.
If that’s the case, the $271 to $277 zone could be next. That was a notable support level that failed ($271), followed by the 50% retracement.
NVDA is the freebie.
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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!