Home Correction trading Trading Plan: March 18, 2022. The Nasdaq (+1.33%) continues its rally… | by Laurentiu Chisca | March 2022

Trading Plan: March 18, 2022. The Nasdaq (+1.33%) continues its rally… | by Laurentiu Chisca | March 2022

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The Nasdaq (+1.33%) continued its rally with average volumes. The price is holding above the EMA 21 and it looks like it wants to break through the SMA50 and go even higher. 13850 is still resistance and should be watched. We are not out of the woods yet, another correction is very likely as well. The 12000 area should also be monitored.

The SP-500 also contained more. The market correctly priced in the impact of the Fed’s decision and now the SP-500 is trying to conquer the resistance at ~4420. The triple bottom pattern is bullish and a close above the mentioned level could signal another advance. But… the volumes remain average. For a solid reversal, institutional money must enter the market.

In the news

Amazon has completed its $8.45 billion acquisition of MGM.

Maserati is the latest luxury car brand to go electric.

The House passes a bill to end normal trade relations with Russia and Belarus.

The US is setting the stage for a controversial Biden call with China’s Xi.

Sectors

  • Yesterday’s Best Sector: Energy, then Base Materials. Worst Sector: Utilities.
  • Best weekly sector: Financial, then cyclical consumption. Worst Sector: Energy.
  • Best monthly sector: Utilities, then Energy. Worst sector: Cyclical consumption.

Feeling

  • NAAIM (weekly, neutral between 70 and 90): 46.68
  • VIX (neutral under 20): 25.67
  • Equity Put/Call ratio (neutral between 0.7 and 1): 0.91
  • CNN Fear & Greed: 26 (Fear)

Lenght

  • Actions above SMA40 (neutral between 30 and 80): 51.37%
  • Stocks above SMA200 (neutral above 30): 35.15%
  • Number of stocks that rose more than 4% yesterday: 437
  • Number of stocks that fell more than 4% yesterday: 29

Revenue reports

fedex flopped 3% in extended trade after reporting quarterly earnings that fell short of expectations. GameStop stumbled 7.5% after hours following a surprise loss as it suffered high expenses due to supply limitations.

Notable earnings reports for today:

Even though all the major indexes closed higher for the third day in a row, the rotation of the sectors raises some concerns.

Good trades yesterday ($TSLA, $BILL). Tightening the Stop Loss to the break-even point is a good idea.

Deere & Co ($DE) has made a great base and is trying to move forward. The GLB (green line tape) might be a good entry. Loss limit: 5%.

Mercadolibre ($MELI) might break through the resistance and cross the black line. Loss limit: 5%.

Exercise due diligence if or when placing a trade. All ideas expressed here are my own and do not represent trading or investment advice.

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