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Focus List Review - Week Ended June 23, 2017

Current Focus List

The VoSI Focus List is a compilation and reference list of stocks for which Pocket Pivot or Buyable Gap-Up Reports have been issued. It is not intended as a "buy list" or a list of immediately actionable recommendations. Stocks on the list may or may not be in proper buy positions, and investors should exercise discretion and proper judgement in determining when and where stocks on the Focus List can be purchased. The following notes are intended to assist in this process. Please note that members can enlarge the Focus List image by clicking on the body of the email and then holding the Control Key while pressing the "+" key until it is large enough to read.

General Observations:

The market continues to defy any “macro-analysis” with respect to distribution days, breadth, underlying economic conditions, and the progress (or lack of it) of the Trump Agenda. Ultimately, it is the action of individual stocks that carries the day, as well as the phenomenon of the “Ugly Duckling” where leading stocks will break down but then set up again in various Ugly Duckling type set-ups like Undercut & Rally, “LUie” and Wyckoffian Retest types of moves.

Thus the market rally remains intact, and in our view as long as the NASDAQ Composite continues to hold near-term support at the 20-dema and longer-term support at the 50-dma, the rally phase continues.

We note that several stocks that were removed from the Focus List in recent weeks as a result of highly negative and deleterious technical action, such as JD, WIX, BOX, MOMO, and TTD are all recovering back up through key moving averages in Ugly Duckling style. BOX, for example, formed a typical “LUie” recovery and posted a pocket pivot off of its 50-dma on Friday. Below is the chart of BOX:

The Market Direction Model (MDM) remains on a buy signal, while the VIX Volatility Model (VVM) is currently on a sell signal.

Removed from the List this Week: None.

Focus List Stocks Expected to Report Earnings this Week: None.

Notable Action:

Applied Optoelectronics (AAOI) regained its 20-dema on a five-day pocket pivot. The stock is in a buyable position using the 20-dema as a tight selling guide. Previously, AAOI held support at its 50-dma and the top of its prior base, which was constructive and offered a lower-risk entry at that point.

Amazon.com (AMZN) is holding tight along the $1,000 “Millennium Mark” which keeps it in a buyable position using the 10-dma, less than 2% lower, as a selling guide for shares purchases above the 1,000 price level.

Appian (APPN) is a very recent IPO in the cloud space, and was first discussed in The VoSI VooDoo Report for Thursday, June 22nd. At that point the stock was working on a potential undercut & rally long set-up as it held along and just above the prior 17.05 low of three days ago. On Friday, the stock cleanly triggered the U&R set-up and then launched 8.52% higher on a pocket pivot move coming up through the 10-day line. From here, constructive pullbacks to the 10-dma would offer lower-risk secondary entry/add points.

Alibaba (BABA) is holding tight in the handle area of a mini-cup-with-handle formation. The last lower-risk entry was along the 10-dma earlier this past week.

Baozun (BZUN) has recovered back up through its prior breakout point in a classic “LUie” type of formation following a failed breakout. The LUie formation describes the pattern formed by a stock that is hit with heavy selling, usually after a breakout or some other positive technical action, and is slammed back to the downside. It then moves tight sideways forming an “L” pattern, and then moves back up to form a “U” type of recovery, hence the term “LUie” to describe this unique phenomenon that is observed frequently among leading stocks in this odd QE-influenced market environment.

Coherent (COHR) is pulling into its 50-dma, and should be watched for support at the line.

Lumentum Holdings (LITE) posted a pocket pivot at its 10-dma on Friday.

Netflix (NFLX) has been added back to the VoSI Focus List by virtue of its move on Friday that carried the stock back above its 10-dma, 20-dema, and 50-dma on a five-day pocket pivot move. This is constructive action and may be indicative of a “LUie” formation that is in process.

Nvidia (NVDA) traded just below its 10-dma on Friday on above-average volume. This must be watched carefully as it could be entering a longer correction and base-building process, assuming it does not top altogether. However, our view is that NVDA, as a significant thematic leader, is more likely to go into a base-building process during any continued market rally.

Square (SQ) is holding very tight along its 10-dma and appears buyable here using the 10-dma as a selling guide for any shares purchased at these levels.

Trivago (TRVG) posted a trendline breakout on Thursday, which is constructive. It was last buyable along the lows of its current base, as discussed in last week’s Focus List Review and our morning Focus List Notes.

Take-Two Interactive (TTWO) was added to the Focus List on Friday based on the “L” formation it is currently in. This remains in flux, however, since a move back above the 20-dema early in the day on Friday failed (likely due to Russell Index re balancing that took place that day). This gives the chart the look of resistance at the 50-dema on heavy volume, likely related to the index re balancing. We would watch for a recovery back up through the 20-dema as a long trigger, or an undercut of a prior low in the “L” formation followed by a rally back up through the low. Currently, the low point in the L is at 72.36, although the stock is still holding up above the prior 72.53 low of June 15th.

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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