It was quite a week for the market where we continued to make new all time highs on most of the major indices and again have ourselves in a position where the market is slightly extended on the daily and weekly charts. Having said this, it is not a time to guess when a pullback is coming and get short the major indices. We could absolutely keep grinding higher here, and there has been no technical signals that a pullback or correction is imminent. Our approach is to continue taking trades with a long bias until we see some sort of strong pullback signal; however, the key is to keep you position size and number of positions on the smaller side since we are constantly on all time high resistance. We will also be keeping a close eye on the VIX this week as it is holding support in the $12 area and looks ready for a bounce here soon. Here are some names that we will be watching this week:
CLVS is a biotech that is the subject of a lot of M&A chatter right now and is seeing some call sweeps that support that. It also has about 50% short interest. It's flagging nicely below its sma200 and looking ready to maybe take another run up at trying to get through it. We like this over $10 for a test of the sma200 around $11 and possible move higher
PETS gapped up in October and has had a nice orderly rounded pullback since and is heading back up towards the highs. Ideally we would like to see this pullback or consolidate a bit and get an entry off the ema8, but we would also consider a breakout over last week's high of 27.61 for a move up to $29 or higher
TLRY is one of many cannabis names that were getting nice moves off of the lows last week. Ideally we would like to see this pullback to its ema8 or even its sma50 and then get an entry on the way back up over $20 for a test of the recent highs around 22.50 and a possible push higher. This name is loaded with short interest, and short squeezes have been a trend lately.
LEVI has a nice cup and handle pattern dating back to October and is coming up out of the handle to test the top of the cup here with a nice 3/8/20 cross. We like this over $20 for a push up $21 or higher
TWTR is a name we liked heading into Friday, and despite a downgrade Friday morning it continued to show some nice recovery. We like this over 34.39 for a test of $35 and possible push higher into the gap, and we would also consider entry on a pullback and hold of the ema8 on the daily
SFIX is another name with a very high short float that is setting up for a 3/8/20 cross on the daily. We like this over last week's high of 25.55 for a push up to $27 or higher
PS has made a nice recent move off a cluster of moving averages, and it's finding a little resistance around the $20 to 20.50 area. We would either look for a break above last week's high of 20.33 or a pullback and hold of the ema8 for entry here with a target of $22
STMP is a name that had a very rough first half of 2018 and is no starting to see a nice recovery. It filled one very large gap already and is getting close to the start of another large gap. Ideally we like this on a pullback to the ema8 and then move back up for entry but would also consider a break over last week's high of 92.71 for a move up to $95 or higher.