There’s been a lot of action but not much progress in the markets this week as the choppy, trendless conditions continue. Things do seem to be improving somewhat: the Nasdaq held a higher low from last week and sellers have lost momentum for now.

That being said, there’s still a dearth of constructive chart setups which indicates that cash remains the best position.

Tonight we’ll cover a few stocks on my watchlist this week, keeping in mind that it’s key to be very selective with new positions and trade with smaller size until conditions improve. It’s easy to get chopped up out there as I can certainly attest to over the past few weeks. Let’s get into it!

Index Update

The market remains below a falling 21EMA with net highs/lows still neutral, signaling strong caution.

The Nasdaq came back up into the recent trading range after undercutting it on Friday. It’s right up against some resistance in this area so we’ll have to watch tomorrow for clues on what it will do next.

The S&P-500 indicates how choppy things have been as you can see the wild swings including gap-ups and gap-downs that make it incredibly difficult to make any real progress. It appears to be holding the 200-day moving average which is positive, but it will face some resistance in this area tomorrow so we may find out whether sellers are still in control.

Portfolio Update

YTD Return: +4.22%

YTD S&P-500: -6.19%

Recent Moves

• NEX - Sold the rest at $7.50 to average 11% on the trade, smaller size though

• COP - Stopped out for a 2% loss as energy names are selling off a bit

• ZS - Bought and sold for a 2% loss

My Positions

I am in 100% cash as the feedback on new buys continues to be poor. Waiting for better setups.

Best Setups

Alpha & Omega Semiconductors (AOSL) reported good earnings two weeks ago and yesterday it broke through the descending trendline on high volume. Today it re-tested the trendline on lower volume and printed an inside-day. For a quicker trade, I’d buy a move above today’s high at $58.50 if accompanied by heavy volume and the market moving higher. Stops $1 lower.

DWAC moved higher today as it looks like volume is returning back into the stock. Now a move above $87.50 on high volume is the buy point with stops $2 lower. This one can trade wildly so keep a close eye on it.

Bill.com (BILL) crossed above my last buy point at $245 and went higher before stopping out. Now it’s showing resiliency after a fantastic earnings report a few weeks ago. The buy point is a move above $262.50 but only with heavy volume as there is significant resistance here. Stops $6 lower.

Snap (SNAP) reported its first-ever profit in the last earnings report which investors weren’t expecting, so it gapped up on huge volume. Now it’s consolidating just below the 50-day moving average. If it can break above the 50-day at $42 on high volume, it could move up to $45-$50.

ZScaler (ZS) has held up better than most in the software space and is resting right on its 50-day moving average. If the market is moving higher, the buy point is a move above today’s inside-day high at $287 on above-average volume. Stops $10 lower.

That’s all for tonight! I will post more setups on Twitter as I see them, but for now, protect your capital!

See you back here on Sunday night for an update on our stocks.

Cheers,

Danny Deals