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MLR - PMP 9/13/13

The major averages traded lower on lower volume yesterday. After a number of up days, it comes as no surprise that the market would need to take at least a one day break. Many leaders which have also made good moves over recent days took a breather, and this is logical given that many are extended to the upside. Retail sales came in weak this morning, but weak economic data serves to bolster the argument for less QE tapering. Economists do expect the Fed to announce a specific magnitude of QE tapering next week after their policy meeting, although the consensus is that it would be a measured amount as the Fed is expected to taper in a gradual manner. Gold has moved below its 50-day moving average while silver is finding support at the 50-day line this morning at the time of this writing. This takes both back to their original "bottom-fishing" pocket pivot buy points in the earlier part of August - investors in either should maintain awareness of their stops with respect to positions in the metals' associated ETFs.

We reported on Chicago Bridge & Iron's (CBI) "bottom-fishing" pocket pivot on Tuesday morning and it has since moved to breakout highs. In this market environment, one may wish to take some profit since stocks often fail their breakouts, and the optimal spots to be buying have been on pocket pivots occurring within the base. Until we get a proper uptrend that is not artificially motivated by quantitative easing, many breakouts are likely to fail, unless the stock is a clear leader with first mover advantage and clearly dominates its space such as Tesla Motors (TSLA). Of course, most stocks that show price leadership in this market environment take 3 steps forward then 2 1/2 steps back, often just enough to hit one's sell stops.

Lululemon Athletica (LULU), which has been forming a head and shoulders top formation for most of 2013, gapped down after announcing earnings. The move has taken the stock down through the lows of the right shoulder in the pattern. The move puts it in play as a short-sale target and a shortable gap-down situation. We see the stock as shortable using yesterday's 77.38 intra-day high as your guide for an upside stop.

Nq Mobile (NQ) had a pocket pivot breakout in Thursday's trade. Earnings have accelerated to near triple digit percentages and sales are in the triple digit percentages over many quarters. Group rank 9, pretax margin 37.5%.

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. ©2020 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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