Markets grinded lower into the close of last week after I noted Wednesday night that the big up-day was “not healthy action overall” and that it had “hit resistance which should prove difficult to push through”. Futures are pointing up around 0.8% tonight, but the indexes remain unhealthy and cash remains the best position.

There are currently the fewest amount of long stock setups that I’ve seen in the past few weeks, which is certainly saying something. The vast majority of setups are busted and need more time to build out bases. Having patience here can save you a lot of money.

That being said, there are several stocks that are setting up for short-sells, so I’ll cover the best ones tonight along with updates on our short-sells from last week. Let’s get into it!

Index Update

The Nasdaq fell back down below the key January-low support level and closed at the lows. It looks ready for lower prices, but either way, it’s going to take some time for this index to recover. There is some minor support below near the more recent lows so look for these levels to hold.

YTD: -17.91%

The S&P-500 similarly finished the week with a bearish close, but finished on Friday with below-average volume which might be a sign that the selling is decelerating. Not much to do here but watch and wait to see if that’s the case.

YTD: -11.79%

Portfolio Update

YTD: +4.46%

Cash Level: 96%

Stock Updates

In this section, I’ll be covering updates on some of the stocks that were mentioned in previous newsletters. Keep in mind that not every stock update will be covered as there is limited space in this email. It will take place of the “Recent Moves” and “Current Positions” sections to remove redundancy.

DocuSign (DOCU) is one that I shorted last week at $98 and it gapped down on Thursday before earnings. I closed it around $93 for a nice gain and then it gapped down big after earnings. Too extended to the downside to consider again.

Digital Turbine (APPS) is one that I noted I’d consider shorting if the market was moving down with stops at $40. It could’ve been picked up around $38 and it continued lower to close below $35 on Friday. Move stops to even if you’re in and consider taking some profit off.

Cloudfare (NET) broke below the bear flag and my sell point at $92 and closed over $3 lower. Place stops at $93.

Peloton (PTON) also sold down below my sell point from last week at $22 and closed nearly $1 lower. I already took most of the position off to lock in profits. Move stops up to even if you’re in.

Best Setups

BP Prudhoe Bay Royal (BPT) is one of the only stocks I’d consider buying if energy and oil are holding up tomorrow. This one is finding support at the 21-day EMA in purple and printed an inside day on Friday. The first buy point is above Friday’s high at $12.10 on heavy volume and add above the descending trendline near $12.50. Stops near $11.40 so use a smaller position.

As a side note, CNQ and COP look decent as well if energy is moving higher.

Now let’s cover stocks that are setting up for lower prices.

Gamestop (GME) is the sac-religious short of the century but is practically begging to be sold after breaking down from the bear flag. I actually shorted a position on Friday afternoon and took it all off for a small profit, but I’d consider adding it back if it retests (and fails) the descending trendline near $97.50. To the WSB crowd riding and dying by this stock: do you want to make money or do you want to be right?

Roku (ROKU) may lead to lower prices if it breaks below $102.50 on volume. I’d add more if it breaks below $100 as well. Place stops $2 above your sell point.

Amplitude (AMPL) is a newer issue that’s been under a lot of selling pressure since December. A huge gap down from a bad earnings report a few weeks ago left it to bounce weakly in recent trading. A break below $16.50 on heavy volume could lead to much lower prices.

The RealReal (REAL) is in the battered Retail sector and is breaking below the bear flag. I’d sell-short a break below $6.20 with stops $0.25 higher.

Samsara’s (IOT) bounces have been getting smaller and smaller since the big selloff in January and it looks primed to break the bear flag. I’d sell-short a move below $15 but only on high volume and tight buy-stops $0.50 higher.

That’s all for tonight! If you liked this column or have any feedback about the content, hit me up on Twitter with the link below or respond to this email.

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

Cheers,

Danny Deals