Weekend Game Plan- 6/5/2022
Two groups getting ready to set sail this week?
Another week of back and forth action lead by energy/oil and gas. However, more sideways action is not a bad thing. We have plenty of solid setups and pivots to look at. Reminds me of two weeks ago when I put out the last report. Those pivots triggered right away and led to a solid multi-week rally in our equity curves.
Lets get started.
Focus List: Full Charts found in HERE in PDF on website.
NEX NOC NVGS FLNG GLNG ZIM GRIN GOGL UDMY GFS UUP ATI
Ed Carson from IBD recaps the Action:
“The stock market rally retreated modestly for the week, though with some big daily moves in the major indexes. The Dow Jones Industrial Average fell nearly 1% in last week's stock market trading. The S&P 500 index gave up 1.2%. The Nasdaq composite slumped 1%. The small-cap Russell 2000 edged down 0.2%. The 10-year Treasury yield leapt 21 basis points to 2.96%, rebounding toward 3% amid generally strong economic data and hawkish Fed comments. That follows three weeks of significant declines in the 10-year yield. U.S. crude oil futures rose 3.3% to $118.17 a barrel last week. Gasoline futures shot up 8.7%.”
From the Top
Indexes put in a little sideways “handle” last week. SPY and QQQ failed right on symmetrical resistance of of the swing higher in early January. They are both right under heavy supply zones. Both also have the Stochastic Momentum Index rolling over. The SMI is not the best indicator, but I have found it is worth noting as it usually denotes a move is getting long in the tooth. Anything can happen, but my bias for next week is lower until proven wrong.
Groups and Sectors
Outside oil/gas and energy, almost every other major sector is in a well defined downtrend. We highlighted setups in GUSH and XOP two weeks ago, and those trades are working great. You hopefully felt the same way and and are managing your positions in those groups. Other groups worth a look are as follows:
Oil and Gas Field Services
Stand out breakouts on Friday included NEX (also put in pocket pivot on heavy volume Friday) and LBRT which brough out of cheat entry Downtrend line break. HAL is setting up while SLB leads the group, bouncing off its breakout pivot along with TDW which already broke out and put in mini handle.
Game Plan- I want to get long NEX but missed it on Friday. SLB also looks easy to define risk in. Those are my go to in this group.
Aerospace and Defense
NOC is leading the charge breaking out Friday. I have seen multiple posts regarding this setup, which has me worried. I will be focusing more on LHX coming out of its little bottom cheat pivot while also taking a stab at NOC (its a really nice setup). LMT is also tightening up nicely.
Oil/Gas Transport via Ships
Great looking group. NVGS broke out but retested its pivot yesterday. This is a high focus for me. Defining risk under the low of Fridays bar is a good spot. GLNG also looks very attractive setting up as as FLNG put in massive volume pocket pivot a few days ago. STNG TNK are the leaders in the group.
Shippers In General
Cargo shippers also look interesting. I am already positioned here, but GRIN has a nice pivot, GOGL setting up continuation action, EGLE and GNK leading the charge while ZIM (Fintwit Fav) bouncing off trendline support with its own little cheat pivot.
Talk about a bifurcated market. The IPO category has names that look like they are about to be delisted and others getting ready to blast higher. UDMY and GFS are my favorites. UDMY broke out above its pivot, backtested and appears to be moving higher while GFS looks similar. OLPX broke its DTL and building out a handle.
On the flipside, WRBY STEP BETZ ARKK FROG are all names I will be looking to add short exposure in IF they trigger out of these bear flaggy setups. Remember, I have a bias for lower prices overall, and looking at some names that look weak is worth it IMO.
UUP- Maybe one of the best trending charts out there. Bouncing off its 50-day, I will be looking to get some of this on my books if it can take out the cheat pivot.
ATI- with a 1,2 and 3 day squeeze and good fundamentals, one to watch on a break of this pivot.
ATKR- Strong growth name trying to break out of its pivot around 116.
Wrap it up
As always, follow the leaders. A couple of names I have been posting and active in are LNTH , ARIS and select energy names. Practice progressive exposure and be ready for anything. I will be sending another email early in the week really focusing on CANSLIM type growth names.
Good luck this week!