It was quite a turbulent week for the market with all sorts of movement but a SPY weekly candle that basically pushed up and then came right back to close a little below where it opened leaving us with a large upper wick and a close below the weekly ema8. The corona virus scare is certainly weighing on the market, and there is no doubt that the market needed some sort of reason to give a decent pullback. We also saw the VIX spike this week, and it may not be done yet. We could certainly see continued if not more volatility in the coming week or more. It will be very important to see how the market in China handles its reopening tonight and how that will affect the US futures overnight. Overall, we are probably in for some more volatility and difficult trading conditions. Here are some names that we will be watching this week:
DDOG has been showing a ton of relative strength in these market conditions and has earnings coming up on February 13th. We like this for a run into earnings ideally on a pullback to the ema8 and then a move back up through the $45 area for entry although we would also consider a high volume move through $47 for a push up towards $50
PRTY continues to show good strength in weak market conditions and is holding its sma20 nicely. We like this over 2.90 for a test of $3 and possible push up to 3.30
PAAS is a silver name that is consolidating around its sma20 in a TTM Squeeze on the daily. We like this over 23.07 for a push up to $24 or higher if the market continues to show weakness and the gold and silver miners start to get some attention
SSRM is a very similar setup to PAAS, but it is a gold name rather than silver. We like this over 18.44 for a push up to the mid $29s or higher
CSX pulled with the rest of the market on Friday, but it is showing some strength relative to the major indices as well as the IYT transportation index. We like this ideally on a pullback to the sma20 and move back up through 75.50 for entry but would also consider a $77 break with volume for entry if the market shows any strength next week. Target here would be the $80 area
ZM showed a ton of strength last week in a weak market. Ideally we like this on a pullback to its sma20 and then move back up through $75 for entry, but we would also consider a break of last week's high of 76.67 for a move up towards the $80 area
Other names that we will be watching include LK for a possible short or long setup depending on how the Chinese market opens, FOLD for a short on a break of 8.69, LOPE for a potential short setup - ideally on a $80 test and rejection, MOMO for a short on a test and rejection of the ema8 or on a $30 break, BYND short on a 3/8/20 cross down, DVA short on a break of the sma20, and PLCE short on a $59 break.
We will be providing a weekly watch list update on Tuesday or Wednesday, once we see how the market digests the opening of the Chinese market tonight.