Weekly Watch List January 27th

Happy Sunday!

It as quite a week for the market as we saw some volatility and red candles in the later part of the week as fears about corona virus started to rattle the market a little bit. The SPY gave us a bearish engulfing candle on Friday and we had a red candle on the week as well. We are seeing a lot of doom and gloom talk on Twitter this weekend, and we think it is important for us to keep some perspective here. Yes, we should be concerned with the pullback, but we should also note that a pullback or rest for the market has been overdue and likely would have come at some point with or without the corona virus. It is also worth noting that no pandemic virus in the 2000s has caused a major correction or recession. Last but not least, we really don't know how bad the corona virus will be. It could be very bad, or it could be not that big of a deal. At this time, it is certainly not nearly as bad as influenza in any given flu season. Taking all of that into consideration, we should continue to manage our risk with the possibility of things escalating and getting worse, but it is certainly not time to go short the market at this point. We will continue to look for opportunities to the long side and simply keep our position size small so that any further pullback won't cause us great pain. Here are some name that we will be watching this week:

CIEN is flagging nicely and showed a little relative strength into the end of the week. It also had a nice TTM Squeeze on the daily. We like this over $44 for a push up to $46 or higher

PTON is a name that is loaded with short interest that showed a little relative strength Friday as it held trend line support and the sma20 on the daily. We like this from 30.50 to 30.77 for a run into earnings on February 5th

ULTA made a beautiful move up in early January and had been consolidation and letting its ema8 and sma20 catch up to the price action a bit. We like this on a little more pullback and would ideally like to get an entry around $268 for a push back up to the recent highs

CSX had earnings last week and moved all over the place on earnings day before pulling back to its sma20 later in the week and getting a nice move back up off of that. We like this over $77 for a move up into the gap above that closes around 78.50

PDCO has a big cup and handle type pattern that was appeared to be ready to break higher before fading a bit with the market on Friday. We like this over $24 for a push up towards $26

EXPE made a beautiful move off its sma20 on Thursday and all things considered held up pretty well in a weak tape on Friday. We like this over $114 for a push up into the very large gap above

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