Last week I sold almost everything I was holding. The market failed a run at its highs on Monday, a lot of stocks failed with it, and I wasn’t going to sit in swings while it made up its mind.
Then last Friday the Nasdaq broke out to a new high, and it’s held it every day since.
Now is the perfect time to try this tool
Tech is leading, a ton of individual names are breaking out, and after months of chop the market finally looks like it wants to go higher.
So I’m long, I’m leaning tech, and I’m not chasing anything.
One name from this week’s watchlist is still setting up, and the market came within 12 cents of taking it off the table yesterday.
Every name on it is a long, and I only go long while Invesco QQQ Trust (NASDAQ: QQQ) is holding up.
Right now that means QQQ staying above $747.46, the old record close it broke above last Friday. While it stays above that line, breakouts in individual stocks have a shot. If it closes back under, your swings are fighting the market.
Yesterday it came within 12 cents of that. QQQ traded as low as $743.23, under the line, and closed at $747.58. It held, barely.
So every name below is on the list because QQQ is still above $747.46. If it closes back under, get smaller and wait for it to get back over.
Here’s where the watchlist stands before today’s open.
2 Trades I’m Already In
Hewlett Packard Enterprise Company (NYSE: HPE) is the one trade on my list that’s still working. I’m long from the $67s.
It closed higher three days in a row, then gave back 1.5% yesterday to $71.00. My first target is still $75.00. I hold as long as the trend stays intact, and one red day isn’t a broken trend.
Corning Incorporated (NYSE: GLW) is the one that broke. I’m long from around $161.00, off a bounce from its 100-day moving average.
Yesterday it fell 6.4% to $152.83, under my entry and almost down to $150.00. My risk on this one was a failure back below the moving averages it bounced from, and that’s what happened.
3 Names That Haven’t Triggered Yet
Intel Corporation (NASDAQ: INTC) needed a clean break and hold over $128.00.
Yesterday it fell 5.3% to $107.08, almost 20% under the trigger. Continued weakness is exactly what it’s showing, and I’m not ignoring it.
Ouster, Inc. (NASDAQ: OUST) was building a base between $40.00 and $50.00, and the setup was a clean breakout out of the top of it with volume.
Yesterday it closed at $39.53, under the bottom of the base. A base that breaks down isn’t a breakout setup.
Micron Technology, Inc. (NASDAQ: MU) is the one I’m watching closest. I want a convincing breakout and a hold above about $1,100.00. The level has to prove itself first, and then I’ll look at entry, volume and risk.
MU last closed above $1,100.00 on June 30. By July 29 it was down to $737.88.
Since September 22, MU has traded above $1,100.00 three times and closed back under it all three times. A buyer at $1,100.00 on any of those days was down by that day’s close.
On Wednesday it ran about 7.5% off its morning low and closed at $1,088.00, $12.00 under the line.
Yesterday it gave most of that back. MU fell 4.8% to $1,035.84 and never got near the line. The high was $1,088.50, under Wednesday’s close. It’s now about $64.00 under $1,100.00.
For MU to trigger, it needs to get back through $1,100.00 and hold it, and from here that’s about a 6% move. If it does, I’ll look at entry, volume and risk.
If it pokes through and closes back under again, it’s the fourth fake-out in three weeks, and I’m still waiting.
Every name in this email is waiting on the same thing, a breakout that holds.
I find mine by hand. I go through the charts, I write down the level, and then I wait for the stock to prove it.
This tool makes the whole process easier.
Stay sharp,
Jack Kellogg
*Past performance does not indicate future results
