The Next Market Leaders - 9/21
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Markets whipsawed around today before ultimately closing down nearly 2% as the Federal Reserve hiked rates by the expected 0.75%. There was no dovish pivot to be had during Powell’s press conference even with his acknowledgement of weakening economic indicators. He strongly reiterated the committee’s dedication to obtaining price stability and rate cuts are unlikely to occur there is clear evidence of that happening. Futures are down another 1% tonight.
The downtrend intact on all timeframes - short, medium, and long. The leader list is dwindling, and all we can do now is wait on the sidelines for the tide to turn back bullish. In the meantime, breakouts are highly prone to failure.
I’ll be posting updates on our leaders tonight, but executing on them will depend on if the selling is staunched in the indexes. When in doubt, it’s better to stay out in this environment. Let’s get into it!
Index Update
The trend remains down on all timeframes as the Nasdaq is below the 21EMA, the falling short-term MAs, and net highs/lows are still down. The McClellan is once again very oversold at -149.
The Nasdaq dropped back down below the the lows set a few weeks ago and looks like it will move down to the next area of support, or potentially to test year-to-date lows. See the 200-day moving average in white that’s screaming lower at the top of the chart? Until price is back above a rising 200-day MA, a new uptrend will not start.
The S&P-500 broke down below the ascending trendline and is continuing lower after several days of high-volume selling over the past few weeks. Now we’re back to watching and waiting for a new low to form.
Stock Updates
First Solar (FSLR) is hanging in the box, still consolidating in a tight range after briefly breaking through to a new all-time high at $140 today. It also printed a new high in relative strength. I’m looking for a higher-volume move through $140 on a day where the indexes can back it up a bit.
Elf Beauty (ELF) held stops at $38.50 and was up as much as 5% today before selling back down with the market. This one had a new high in relative strength as well, but it looks vulnerable if there is more weakness in the market. Keep stops where they are.
Chipotle Mexican Grill (CMG) is now up just 2% from the $1,635 buy point and looks weak after a bearish outside-day today. Move stops up to even.
Best Setups
The setups below are ideas, not outright buys; placing a trade is discretionary and depends on both the price action and volume. To succeed, you’ll need to make the trade your own based on your rules for entering and taking profits, and always use a stop-loss!
Cal-Maine Foods (CALM) is looking exceptional after a high-volume breakout and close at all-time highs on today of all days. This one has been on my radar but I wasn’t expecting it to push higher today and wasn’t going to buy when it did. I’d consider buying a test and hold of the $60 area with stops at $58. Otherwise, will wait for another buy point to form.
Celsius Holdings (CELH) hasn’t been able to hold the 21EMA and is now testing the 50-day as support. The buy point is a high-volume move through $110, but it’s looking a bit tired.
Enphase Energy (ENPH) continues to consolidate just below all-time highs and above the 21EMA. I’d look to buy a heavy-volume move up through $323 with stops at $310.
H&R Block (HRB), has tightened up nicely around the 21EMA and flashed yet another new high in relative strength today with two low-volume days in a row. That’s great to see. I’d look to buy a move through $46 with stops at $44.30.
ShockWave Medical (SWAV) is a high tight flag candidate after moving up 100% from June lows and only correcting 14% from the highs. It’s forming a pivot point around $300, but volume will need to be excellent.
That’s all for tonight! See you back here on Sunday night for an update on our stocks.