Current Report Watch 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.
The major market indexes spent the week in a holding pattern, likely in anticipation of this Wednesday's Fed policy announcement. The S&P 500 Index is in a short week-long consolidation as it sits just above its 50-dma. The NASDAQ Composite Index is in an identical consolidation but is sitting just below its 50-dma.
The Market Direction Model (MDM) went to a buy signal on Thursday. Please refer to the latest report: https://www.virtueofselfishinvesting.com/reports/view/market-direction-model-model-switches-to-buy-on-june-13-2019
Stocks Expected to Report Earnings this Week: None.
Lululemon Athletica (LULU) reported earnings Wednesday after the close and gapped up on Thursday morning in a breakout attempt. The stock reversed to close near the intraday low as the breakout failed, but LULU held support at the 10-dma, 20-dema, and 50-dma on Friday on above-average volume. This may still be actionable on the long side with the idea of using the 50-dma as a tight selling guide. Given the sharp move off the shakeout lows of two weeks ago, the selling seen into Thursday's breakout is likely logical.
Chipotle Mexican Grill (CMG) broke out again this past week after shaking out through the lows of its current base the prior week. This led to an undercut and rally (U&R) move back up through those lows and a sharp, high-velocity move straight back into new-high price territory. The breakout, however, occurred on very weak volume. If CMG can hold the breakout, however, it may still be viable, light volume or not. Meanwhile, we would, however, consider a pullback and test of the rising 10-dma or 20-dema as a better, lower-risk entry.
Shockwave Medical (SWAV) was reported on as a pocket pivot two Fridays ago and the stock immediately attempted to breakout from a short flag formation the next day. We do not advocate chasing such strength, however. That move ran into logical selling given the extended upside in the stock at that point, and the ensuing pullback undercut a prior May low in the pattern before closing back above it. The stock is now drifting into the 20-dema, closing just eight cents below the line on Friday as volume dried up to -56.9% below-average. We would look to buy any move back up through the 20-dema while using the 20-dema as a tight selling guide.
Facebook (FB) illustrates the at-times bizarre action seen in this market. The massive-volume break two weeks ago looked as if it certainly spelled doom for the stock, but after running into the 200-dma and then testing it once the next day, FB has simply trudged right back up to its 50-dma. This has occurred mostly on news of its new crypto-currency, and news that several other companies, including V, MA, PYPL, and UBER, would be investing in the new GlobalCoin, as it is called, helped sent FB gapping right up into its 50-dma. It is not clear, however, that this isn't just setting up a short-sale entry right here at the 50-dma. This can certainly be tested on the short side at the 50-dma, with the idea of using the line as a tight upside stop should the stock keep going.
Advanced Micro Devices (AMD), the last semiconductor stock left standing in this market, has pulled back to the top of its prior base and the 20-dema. Selling volume was higher on Friday, and we would prefer to see volume drying up on such a pullback. Nevertheless, this can be viewed as a lower-risk, more opportunistic entry spot where risk can be kept to a bare minimum by using the 20-dema as a tight selling guide.
Other stocks pulling into their 10-dma or 20-dema in constructive fashion: CYBR, IAC, PAYC, TROX. In this position, these stocks may offer lower-risk entries along the two short moving averages while using them as tight selling guides. In general, our preference is to consider such pullbacks to represent lower-risk entries as compared to chasing upside strength, which we do not advocate in this current market environment.
Opportunism in looking for buyable pullbacks, either coming into a logical area of support or on U&R type moves, is preferred as this keeps risk to a minimum in what can be a treacherous market given its current, extreme news-orientation. We expect that volatility will continue to be the norm once the Fed policy announcement is out on Wednesday, so it is possible that the market will continue to track time until then. Fed CME Futures expect the Federal Reserve to reduce rates 3 times over the next 5 meetings, but is expecting the Fed to keep rates steady when they next conclude their 2-day meeting this Wednesday.