It was quite a week for the market with new all time highs made for the SPY and the QQQ, but with an end to the week that left some not so great looking weekly candles on most of the major indices. It seems that concerns over corona virus are starting to creep back into the market, and that is weighing on the major indices. This is not meant to sound cold or harsh, but it is important to note that the market will not care so much about the human impact of the virus as much as it will care about the economic impact. After largely brushing off concerns earlier this month, the market is now getting a bit worried about the impact on the Chinese consumer and on the global supply chain. We will see if there is a point soon where this latest dip gets bought or if we are in for a deeper pullback. We also want to keep a close eye on the VIX which is in a very bullish looking TTM Squeeze on the weekly. We will continue our approach of taking shots in small size to both the long and short side until the current choppy conditions settle into a clearer direction. Here are some names that we will be watching this week:
TLRY showed a lot of relative strength last week as it recovered off of lows and its rally stalled into the sma200 and quite a bit of overhead supply. We like this on a pullback and then move back up through $19 for a push up to $21 or higher
GORO is a gold name that is lagging some others that have already had a big breakout, but it got great volume last week and looks ready to follow the others. Ideally we would like to see a small pullback to some anchored volume by price support and then enter on a move back up through 5.60 for a test of $6 and possible move to the mid to high $6s
NUE is starting a nice reversal after weeks of weakness and looks ready for a 3/8/20 cross up in a TTM Squeeze on the daily. We like this over 48.70 for a move up to $50 or higher
CL is a consumer defensive name and these are starting to get some attention with some signs of concern in the momentum names. Ideally we like this on a pullback to anchored vwap and/or the sma20 and then a push back up through $75 for a test of the recent highs around $77.50 and possibly higher
PLAY gapped up on earnings last month and retraced nicely to its sma20 in a TTM Squeeze and is looking ready for a break back to the earnings highs if the market cooperates. We like this on another test of that sma20 and then push up through $46 for a move to $49 or higher
TRIL is in a very nice flag pattern in a TTM Squeeze and has some biotech trial data catalysts in the 2nd quarter. Ideally we like this on a test and hold of the sma20 for a possible move out of the flag to $5 or higher
UBER is riding a nice trendline up after its gap up on earnings earlier this month. Ideally we like this off of the trendline around 40.50 for a push up to $42 or higher, but we would also consider entry on a pullback and hold of the sma20 below.
NFLX is a name that we are watching for a potential trade to the short side. It has been on a strong run but it is getting into an area of heavy resistance with a lot of room down to support. Ideally we'd like to see NFLX push up just a bit and meet resistance and then enter on a break of $380 for a move down to $370 or lower
XLK is a tech sector ETF that is also looking good for a short. Ideally we would like to see this retest the $100 level and get short on a rejection there or a break of the sma20 on the daily. If this sets up I would be looking to take profits somewhere around the $95 area that was support in the January pullback. It is worth noting that there was some unusual put sweep activity in this name last week.
BABA is probably my favorite short setup right now as it lost both its sma20 and sma50 on Friday with no volume below to support it. Ideally we would like to see a small pop that meets resistance and get short for a move down to the $200 area