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VoSI Focus List Review for the Week Ended August 3, 2018

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 and which have been deemed suitable for inclusion on the Focus List. Not all stocks for which a Pocket Pivot or Buyable Gap-Up report has been issued will necessarily be added to the list. 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: 
Major indexes experienced a choppy week, starting it off with a sharp sell-off on Monday that took the NASDAQ Composite Index below its 50-dma. The index was able to regain the line the following day, and gained upside momentum thanks to the excitement over Apple (AAPL) achieving a $1 trillion market cap, the first U.S. company to do so, proving that the end user experience is key through innovations such as Apple Pay and FaceTime.

That has taken the index, along with the other major market indexes, back up closer to their prior July highs, but still within a choppy range. Meanwhile, leading stocks present a very mixed bag, and on Monday many became oversold after sharp downside breaks of anywhere from 2-5 days leading into Monday. The environment still dictates that investors continue to heed selling guides, as many leading stocks remain in a troubled state.

The Market Direction Model (MDM) remains on a buy signal.

Removed from the List this Week: None.

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

Notable Action: 
Baozun (BZUN) broke below its final selling guide on Monday as it sliced through its 50-dma on heavy selling volume. It has since moved lower, and in our view using the 20-dema as a tight selling guide or the 50-dma as a wider selling guide has already forced holders of the stock out. While BZUN was one of the only Chinese names that had held up in the face of the trade war, its recent action on increased selling volume below major areas of support suggests tough times ahead. Should the trade issues with China be resolved, BZUN should be closely watched for playable, low risk undercut and rally moves.

Fortinet (FTNT) illustrates the volatile nature of leading socks after breaking down below its 50-dma on Monday but then gapping back to the upside after reporting earnings on Wednesday after the close. The Thursday gap-up was a buyable one, and the stock remains extended for now. It is likely, however, that holders of the stock may very well have been pushed out when the stock suddenly and sharply broke to the downside two Fridays ago and then pierced the 50-dma this past Monday.

Netflix (NFLX) failed to hold above its prior 344 low on Friday, running into resistance at the 10-dma and then reversing back to the downside on increased volume vs. the prior day. In our view, the stock was a sell when it failed to hold the 50-dma back in mid-July after rallying back above the line in a recovery attempt from a post-earnings gap-down move.

Square (SQ) also suffered from some sharp selling earlier in the week but held support at its 50-dma. After reporting earnings Wednesday after the close, the stock opened down slightly but bounced off the 50-dma to rocket higher and post a pocket pivot move back to its prior highs on heavy volume. On Friday, SQ retraced more than half of Thursday's move on heavy volume but held near-term support at the 20-dema. Technically, one could attempt to purchase shares on the pullback to the 20-dema, with the idea of using the line as a tight selling guide. The action is, however, quite erratic, so one should remain vigilant.

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. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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