Every Tuesday we hunt for turning points for equities in the Stock Market. Last week’s board put two bottoms through their targets, and this week the scan flagged four new setups. Three are strategic bottoms. Sellers dumped them on a headline and left them at or near their lows for the year. One is a strategic top that ran so far, so fast, that its momentum gauges hit the ceiling, making me think we could be in for a reversal to the downside. Before the new board, lets take a look at our board from last week where he had some of the biggest winners of this entire series!
LAST WEEK’S SCORECARD
We called three bottoms and one top on October 20. Two bottoms hit their targets. One bottom hit its exit. The top never triggered, so it never became a trade. Lets take a look at all four to better decipher what went right and what went wrong.
$CSCO did everything we asked. We flagged it at $105.59 after a security headline knocked it off its high, and it cleared the $107.39 first target the next day. On October 22 the Nasdaq fell 2.6% and Cisco dipped to $103.58, still more than $3 above our $100 exit. Buyers came back. Tech stocks rallied 2.2% on Monday, and $CSCO took out $111. Today it traded as high as $112.69, a 6.7% gain from the call, with earnings still ahead in mid-November.
$AMPX posted the biggest move on the board. We called it at $7.58, the same day it set a $7.26 low. One session later it jumped 9.6% and tagged $8.39, through the $8 first target. Sellers pushed it back to $7.66 on the Nasdaq selloff, but they never reached the floor. Today it added 6.4% and topped out at $8.92, up 17.7% from the call and 8 cents shy of the $9 target. That target is still open, and Amprius now reports on November 11, and I think we have more upside in the future closer to some previous levels of support in the $12’s!
$SCHW was the one trade that didn’t play out to plan. I called it at $90.89 and said a daily close under $90 would invalidate the upside thesis. It peaked at $92.44 on October 22, $1.72 short of the $94.16 first target, then drifted lower. Financials fell 1.1% on Monday, and Schwab closed at $89.73, 27 cents under the line. The exit cost you 1.3%, and the stock slipped again today to $89.30. Can’t hit them all and our wins vastly outweighed the stop on Schwab!
$TW never gave us a trade. The top needed a daily close under $114.73 to confirm, and it never closed below $119. It closed at $120.01 on October 21, one cent over our invalidation, and climbed to $123.45 by Monday. Today it gave back 3.1% to $119.67, still almost $5 above the trigger. JPMorgan raised its target to $136 from $117 after the Trumid deal, and Barclays moved to $130 from $116. I wanted to see price confirm the top before we leaned on it. Price never confirmed, and we lost nothing. Sometimes the best trade is no trade at all! Tradeweb reports Thursday.
THIS WEEK’S TAPE
My market sentiment post from yesterday will lay out the full story but if you missed it ill provide a concise summary below. Money moved between sectors last week instead of leaving stocks. On Wednesday the Nasdaq fell 2.6% while staples and utilities rallied. On Monday energy and tech led the S&P 500 up 0.7%, while financials and communication services lagged.
Today buyers spread out. The S&P 500 gained 0.6% to 7,722.60, and the Nasdaq and Russell 2000 each rose 1.2%. The VIX fell 4.7% to 17.52, down from 19.03 last Wednesday. As midterms are getting closer and the market is finding its footing small caps kept are starting to keep pace with tech.
Rotations like this knock good companies down for varied periods of time even if there is nothing wrong with the business. Those are the opportunities I look for with this segment. Today’s rally left a few names behind. Two of this week’s bottoms closed at or near 52-week lows on a day the Nasdaq rose 1.2%. Each setup has a trigger and an invalidation. I lay out my 4 picks, reasoning, and data to back it up below.
UNLOCK THIS WEEK’S BOARD
Last week two of our three bottoms hit their targets, and the top we flagged never triggered, so it cost nothing. This week’s four setups sit below the line: I’ve laid out the floor, the trigger, the targets, and the exit plan for each one. Paid subscribers get the full board every Tuesday, plus a scorecard that grades every call, wins and misses alike. If you want the institutional data for yourself, head over to Trader Matrix, their team likes our work so much that they provided us with our very own HGR Discount Link!
