Current Focus List
The VoSI Report Watch 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 List can be purchased. The following notes are intended to assist in this process. Please note that members can enlarge the 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 NASDAQ Composite Index posted an all-time high on Friday, while the S&P 500 posted a new all-time closing high. The Dow remains less than 2% below its all-time highs as it was plagued by big declines in Caterpillar (CAT), Intel (INTC), and 3M Company (MMM) this past week. The market uptrend remains intact, although some interesting cross-currents continue to show up. Big breaks in leading stocks like Intel (INTC), Xilinx (XLNX) and iRobot (IRBT) demonstrate that risk remains in this market, and one should not get complacent despite the new index highs.
We have also seen some names on our report watch list get hit after earnings. World Wrestling Entertainment (WWE) had recently broken out to new highs and was up nicely from where we first reported on the stock a month ago after it posted several pocket pivots along its 50-dma and 83-84 price level. It cratered on Thursday after reporting earnings, but buying the pocket pivots rather than chasing the breakout two weeks ago would have ensured a profit if one had sold one the stock gapped below the 20-dema on Thursday. In general, we believe that buying opportunistically on constructive pullbacks is far less risky in this market than chasing strength, with BGUs being the one exception.
The Market Direction Model (MDM) remains on a buy signal.
Focus List Stocks Expected to Report Earnings this Week: Advanced Micro Devices (AMD), Paycom (PAYC), Tandem Diabetes Care (TNDM) all on Tuesday after the close, Exelixis (EXEL) on Wednesday after the close, Viavi (VIAV) and Yeti (YETI) on Thursday after the close. Please note that the Report Watch List above is sorted by nearest earnings due date first (purple-highlighted column).
We reported on Facebook (FB) Thursday after it gapped up following earnings. The move was a buyable gap-up (BGU) with a 192.12 low, but the stock dipped below that price level on Friday. However, the drop was less than 2% below and within reasonable, allowable downside porosity. FB closed Friday at 191.49, just below 192.12, and we would look for a move back up through 192.12 as confirmation that the BGU remains in force.
ServiceNow (NOW) was also reported on Thursday following its own post-earnings buyable gap-up move. The stock tested the 258.18 intraday low of the BGU price range on Friday and held within 1/2 a percent of the low before turning and rally back up towards Thursday's intraday highs. The stock is technically still within buying range of the BGU, using the 258.18 BGU low plus 2-3% of downside porosity as a selling guide, but buyers should have taken advantage of Friday's pullback to gain a more optimal entry closer to the 258.18 price level.
The uncertainty over the issues regarding Boeing's (BA) 737 Max 8 and 9 aircraft and its impact to the company's fundamentals is starting to diminish. We are seeing signs of this diminishing uncertainty in the chart. BA posted a pocket pivot on Wednesday at the 10-dma on above-average volume, which looks constructive despite the stalling action, since it held up well on Thursday on a five-day pocket pivot. The evidence is building for a potential recovery in the stock as the 737 Max 8 and 9 issue gains clarity.
ZScaler (ZS) posted a pocket pivot at its 10-dma and 20-dema on Thursday after posting an undercut & rally (U&R) move six trading days ago. It held tight along the 10-dma and 20-dema on Friday as volume dried up sharply, keeping it in a buyable position using the two moving averages as tight selling guides. Earnings are not expected until early June.
Netflix (NFLX) illustrates the concept of avoiding the urge to chase strength and instead maintain an opportunistic approach by waiting for logical pullbacks. In this case, the new-high breakout on Tuesday of this past week was an improper buy point in the sense that one would simply be chasing strength. The stock then pulled back into its 10-dma and 20-dema as volume dried up, putting it in a proper, lower-risk entry position for those patient and opportunistic enough to wait for it. In this market, patience and opportunism are virtues of selfish investing. Adhere to them.
