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.
The S&P 500 Index broke below its 50-dma on Thursday on higher volume, but quickly recovered back above the line on Friday following what was perceived as a "strong" jobs number. The NASDAQ Composite Index, however, rallied right up into its 50-dma and for now remains below this key resistance level. If we can see the NASDAQ push back above the 50-dma in the coming days, the market may be on the mend, although this is unclear for now. For this reason we advocate keeping a lot of dry powder in the form of cash handy in order to take advantage of any developing opportunities.
Market Direction Model (MDM) is currently on a cash/neutral signal. The VIX Volatility Model (VVM) is currently on a sell signal.
Removed from the List this Week: AMZN, FB, NVDA, SQ, NFLX, TRVG, and TSLA. In some cases we are taking profits in these names, and they could be added back to the list depending on how their current price/volume action resolves itself in the coming days. In addition, as we move into summer earnings season, the situation with many of these will likely clarify in terms of the potential for continued upside, if any.
Focus List Stocks Expected to Report Earnings this Week: None.
Applied Optoelectronics (AAOI) posted a five-day pocket pivot on strong volume Friday as it cleared its 50-dma. The stock was boosted by a buy recommendation and $95 price target from an obscure analyst firm, D.A. Davidson. AAOI had posted a five-day pocket pivot volume signature on an up day on Thursday, but failed to clear its 10-day moving average, thus did not qualify as a bona fide five-day pocket pivot. Note that we like to see clusters of five-day pocket pivots in lieu of a single ten-day pocket pivot.
Arista Networks (ANET) violated its 50-dma on Thursday, but was able to regain the 50-day line on Friday as buying volume increased slightly. This remains in a compromised position, but we would like to see the stock holding above the 50-day line as it may set up again. This, however, remains an open question.
Appian (APPN) posted a trendline breakout on Friday on strong volume. The move also qualified as a single five-day pocket pivot, but the volume move above the 10-dma and 20-dema is sufficient to call this a bullish move. We would watch for any low-volume pullback into the two short moving averages and the declining tops trendline as shown on the chart as a potentially lower-risk entry.
Alibaba (BABA) has entirely ignored the general market's gyrations over the past several days as it remains in a mini-cup-with-handle formation. Over the past few days the stock has been holding tight along its 10-dma as volume dried up to -55% below average, a "voodoo" volume signature. This puts the stock in a lower-risk entry position using the 20-dema as a reasonable selling guide.
Baozun (BZUN) has wedged its way back up to new highs, with volume coming in below-average on Friday. This is extended in this position. and not buyable at current levels. We might even consider taking profits into this move with the idea of buying back on a constructive pullback to the 10-dma and the top of the prior base.
Lumentum Holdings (LITE) posted a pocket pivot on Friday as it pushed above its 10-dma and 20-dema. The stock was likely moving in sympathy to its cousin, AAOI, but the move can be played as it lies. Any constructive, low-volume pullback to the 10-dma or 20-dema could offer a lower-risk entry opportunity.
ServiceNow (NOW) is working on a base as it triangulates a bit around its 20-dema. Over the past few days the stock has held along its 20-dema with volume drying up, which could put it in a buyable position using the 20-dema as a tight selling guide.
Take-Two Interactive (TTWO)has been holding support at its 50-dma, but volume support has been lacking. On Friday the stock moved to the top of its current four-week range on light volume but is not giving any concrete buy signals as it bounces along the near-term lows.