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.
A volatile start to the week that saw the NASDAQ Composite Index pull a big outside reversal to the downside off the highs on heavy volume ended rather quietly as the index held tight along its 10-dma with volume declining. Cloud names across the board were hit with heavy selling on Monday but have mostly stabilized without further downside for now.
The S&P 500 Index is sitting near its June highs and island top which so far has presaged little more than a five-week consolidation in the index.
Complacency is setting in as the CBOE Total Put/Call Ratio ($CPC) sinks down to multi-year lows. From a contrarian viewpoint, extreme low levels in the put/call ratio can be a cautionary sign. As of yet, however, price/volume action in the indexes has remained relatively benign and no obvious change in market trend is evident at this time, although the situation always remains fluid.
The Market Direction Model (MDM) remains on a BUY signal.
Focus List Stocks Expected to Report Earnings this Week: Tesla (TSLA) on Wednesday after the close.
Fortinet (FTNT) and Atlassian (TEAM) were crushed this past week following prior breakout attempts and are now starting to play out as later-stage base-failures, hence potential longer-term short-sale set-ups. Currently both stocks have undercut prior lows in their patterns which could set up U&R types of rallies with the first reference for potential resistance at their 50-dmas. FTNT also shows its 10-dma and 20-dema now crossing below the 50-dma, and as these move down these also present additional references for potential resistance on any U&R types of moves.
Netflix (NFLX) reported earnings on Thursday after the close and gapped down to its 20-dema. It held support at the line but is now back below the 10-dma and the $500 Century Mark which could serve as near-term resistance. Based on the Seven-Week Rule, the 50-dma would serve as a final selling guide, although it is about 10% below Friday's close. The pattern currently looks unstable and may need to consolidate at best since a decisive breach of the 20-dema would have bearish implications.
Cisco Systems (CSCO) posted a pocket pivot on Friday. The company is expected to report earnings on August 12th.
Nvidia (NVDA) looks very similar to the NASDAQ Composite as one of its highest-priced big-stock components. It was hit with a low-volume but still ugly-looking outside reversal off the peak on Monday but found strong pocket pivot volume support at the 20-dema on Tuesday. NVDA is expected to report earnings on August 13th.
Livongo Health (LVGO) has been a strong Cov-19 related play on the list since we first issued a Pocket Pivot Report on the stock in early June. It has recently cleared the $100 Century Mark. Notice that the stock has now obeyed the 10-dma for at least seven weeks, so using the Seven-Week Rule one could use the 10-dma or even the $100 Century Mark as reasonable selling guides. LVGO is expected to report earnings on August 6th.
As gold and silver remain near recent highs and continue to maintain current uptrends off the March lows, Bitcoin is attempting to stabilize along its recent lows. The Grayscale Bitcoin Trust (GBTC) posted a U&R long entry on Friday when it undercut and then rallied back above its prior 9.18 low. This triggered a long entry signal at that point using the 9.18 price level as a tight selling guide. The GBTC then rallied robustly to close at its highs of the day. We would like to see a quick move back above the 200-dma as additional confirmation of Friday's U&R.
Members should take the time to review their positions and establish selling guides based on the Seven-Week Rule. For example of a stock has held above the 10-dma for seven weeks or longer then one would use the 10-dma as a selling guide. If instead it has shown a tendency to hold above or "obey" other moving averages such as the 20-dema and 50-dma for at least seven weeks or longer then those moving averages would serve as your selling guides. We advise to always have a sound selling plan as this avoids needless panic during sharp market sell-offs.