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Market Lab Report - Premarket Pulse 6/6/17

Major averages digested recent gains by falling slightly on lower, below average volume. U.S. stock futures are trading lower ahead of several notable macro events taking place on Thursday. In Europe, the European Central Bank will make its decision on rates while voting on the UK general election begins though final tallies will not be known until Friday. In the U.S., former FBI director James Comey will testify before the Senate Intelligence Committee as lawmakers investigate a possible coordination between the Trump presidential campaign and Russia.

Focus List Review

Nearly all Focus List stocks are extended from their 10-day moving averages as they have performed well in recent days. For this reason, outside of holding existing positions taken at lower prices, we see no reason to be aggressive on the long side at the current time. Meanwhile, trailing stops should be monitored closely.

JD continues to trade near its 20-ema, a point of lower risk using the 20-ema as a selling guide.

BOX was added to the Focus List as a BGU set-up, although it is more of an opportunistic call. The stock had a sharp upside gap-up and move higher on Friday after earnings, but yesterday gapped down to the 10-dma after a large block of nearly 6 million shares was priced near the line. This could set up a lower-risk entry at this point, but the question is whether buying interest will get absorbed at these levels, keeping the stock from rebounding strongly. For this reason, using the 10-dma as a tight selling guide is advised.

BZUN reversed back below its 10-dma but held above its 20-dema, which should serve as near-term support. Selling volume picked up sharply yesterday at 69% above-average, however, so we'd need to see the stock hold the 20-dema with volume drying up before attempting to pick up shares at the 20-dema.

COHR has pulled into its 20-dema on light volume, which could be viewed as a lower-risk entry position using the 20-dema as a tight stop.

LITE has pulled into its 10-dma on low volume that was -57% below average. which could put it in a lower-risk entry position. The stock has had a sharp upside move since we first put it on the list as it was coming up through the 50-dma back in early May so may need more time to put in some work along the 10-dma.

MOMO popped up and off its 50-day moving average, as we discussed it might be set up to do in our weekend Focus List Review.

SNAP was downgraded yesterday and consequently broke below its 20-dema and 10-dma lines, which triggered sell signals in the stock. After holding very tight along the 20-dema with volume drying up to extreme "voodoo" levels, it should have moved higher from there. Yesterday's action is a negative change of character that should likely be heeded.

WIX pulled into its 10-dma yesterday on lighter, below-average volume, which is constructive following Friday's move back above the 10-dma, 20-dema and 50-dma. We prefer entries closer to the 50-dma as the stock continues to work on what is now a six-week base.

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This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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