Hello Traders & Investors,
Scroll down to see the stocks we have on watch this week
We’re back to another Weekly Market Brief & Watch List!
We saw some quick action on a few alerts last week with PEP reaching 115% in just 3 days followed up by AFRM seeing 38% and AAPL getting up to 54% both in just 2 days! The market is heating back up with earnings getting heavier by the week.
Look for earnings reports from the bigger names, such as TSLA, NFLX, SCHW, GS, BAC & LMT to influence market action.
We’ll also be on the lookout for retail and employment numbers as well as Chairman Powell who is scheduled to speak Wednesday, to all have an effect as well.
Recent Winners Tracking
AAPL… 54% from 10/12
AFRM…38% from 10/12
PEP… 115% from 10/10
X…34% from 10/5
PYPL…38% from 10/4
AAPL…95% from 9/28
DKNG…39% from 9/27
OXY…81% from 9/25
WMT…513% from 9/21
ABNB…94% from 9/21
AMD…79% from 9/20
*Max gain potential on options alerted so far/before expiration
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Weekly Learning Focus
When market action is bearish, it’s likely there are double top setups🏔️ 🏔️ Here’s 3️⃣ ways you can trade them‼️
1️⃣ Short the 2nd test: The idea here is anticipating the double top, and setting a stop when you get a close over the previous top.
2️⃣ Catch the breakdown: The idea here is catching the move after seeing the double top confirmation, set a stop over both prior tops.
3️⃣ Wait for neckline retest: The idea here is to wait for the bounce move back up to the neckline, short with a stop when a close above the high of the candles at the neckline occurs.
This pattern occurs on all time frames, trade accordingly. Day traders will use smaller time frames 1, 5, 15 min ⚡ Swing traders will use larger time frames. 4hour, 1day, 1week 🐢
We hope this teaches you how you can trade the double top pattern when things get bearish. 👨🏫
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S&P 500 ETF (Ticker: SPY) – Daily Chart
Opened last week at: $427.58
Hit a weekly high of: $427.34 on Thursday, 10/12
Hit a weekly low of: $427.58 on Monday, 10/9
Closed the week at: $431.50
After getting a nice pop to start the week, bullish action fizzled out a bit on Thursday and Friday. That being said, It seems to be holding up over the 20 SMA (daily chart). If buyers return and the SPY can stay strong over the $426 mark, we could see a move back up to test $440.
However, if bears maintain control and $426 breaks to the downside we could see a further slide down to $420 and possibly beyond.
Charts Provided By: Finviz
Weekly Stocks to Watch
Here’s some of the stocks we have on watch for the beginning of the week…
As always, we’ll be heavily focused on our news feeds & scanners for prime opportunities throughout the week.
Palantir Technologies Inc. (Ticker: PLTR) – Daily Chart
Sharp breakdown to close the week. We want to keep eyes on this to see if there’s more downside. Look for overhead resistance at $17.50-18.50. If selling does heat up there’s short targets of $16.50 – 15.5. Strong support at the $14 range maybe it heads back if the above short target levels do not hold.
Smith & Wesson Brands Inc. (Ticker: SWBI) – Weekly Chart
Trending well for the past month, running up into past resistance at the $15+ range. We noticed this name on our Trading Room Scanners. SWBI closed last week strong over $14. Look for that test / long targets of $15-16-17.5 this upcoming week. If it gets there, look for either it to hold or watch out for reject back to $13.
Wayfair Inc. (Ticker: W) – Daily Chart
Wayfair has sold off hard. Closing the week at $47.31. We have seen strong options flow for $40puts in the Trading Room. There should be some support here at the $47 range, but if that cannot hold, a move towards $43-40-35 is likely especially if the market moves bearish.
Block Inc. (Ticker: SQ) – Daily Chart
Big rejection here. This was on watch a few weeks ago. Here’s what we said about it.
“This name has been a short sellers dream for a while now… it’s been bleeding out. However, last week we saw a ton of bullish flow come into the Trading Room for $45 & $50 calls. Strong resistance at $45.5. But if that breaks to the upside, look for bullish moves. We’re looking at $42.5 as good support. If that fails, we may see a move into the $30s. However, if $44-42.5 holds, and we see bullish action in the market, look for a move to break $45.5 and move towards 50 in the coming days/weeks/months.”
Flash to today, we saw SQ hit +$47.5… Those levels got rejected very hard, and it sold off to close at 43.17. There could be more pain to the downside here if shorts keep control. Look for short side targets of $41-40 & if this level doesn’t hold. Look out for the move into the $30s. Use $47.5 as upside res until it breaks above and holds.
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