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VoSI Market & Report Watch List Review for the Week Ended June 28, 2019

Current Report Watch 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: 
Over the weekend the U.S. and China agreed to restart trade talks while President Trump also announced that the U.S. would rescind the ban on U.S. companies selling their products to Chinese tech giant Huawei and hold off on any additional tariffs for now. The previously imposed tariffs remain in force, however. This may likely spark a gap-up open on Monday which would be mostly non-actionable using orthodox methods unless stocks are at proper entry points. However, gap-up moves in leading stocks could lead to potentially actionable buyable gap-ups (BGU), so can be watched for on Monday. With the NASDAQ Composite Index near its prior highs it is possible we could see a breakout to new highs this week.

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

As we've indicated, the best possible set-ups that may emerge when trade resumes on Monday morning would be potential buyable gap-up or even bottom-fishing buyable gap-up moves in companies seen as benefiting from the resumption of trade talks and more importantly, the lifting of the ban on Huawei. One name that fits the bill and which also has been on our watch list for many weeks now is Advanced Micro Devices (AMD). It is currently sitting right on top of a prior base breakout point and near its 10-dma and 20-dema. This itself can be viewed as a lower-risk entry position, but odds are very high that AMD will gap-up on Monday. Therefore, this can be watched for a possible BGU to develop.

We would also keep a close eye on other names seen as benefiting from the weekend trade news. This would include other semiconductors like
  • NVDA, ICHR, AVGO, LRCX , ON, MU, OLED, CRUS, UCTT, SWKS,  IIVI, XLNX, AMAT, MKSI, SIMO, LITE, QRVO, and QCOM among some of our favorites. Also, keep a close eye on related telcoms, such as Acacia Communications (ACIA), Arista Networks (ANET),  Ciena (CIEN)Finisar (FNSR), and Inphi (IPHI) among our favorites. Note that some of these names combine as semis and telecoms like IPHI which is considered a fabless semiconductor but makes devices for servers and routers. It is sitting in a base, so a gap-up move here could also play out as a breakout BGU.

Remember that a BGU strategy for Monday's open can also keep risk to a minimum if the market has second thoughts about what is essentially a return to a prior status quo. A resumption of talks is only that, and so far no concrete agreement has been forthcoming. Also, if the market views these trade developments as keeping any Fed interest rate cuts on hold, then it becomes a double-edged sword. Therefore, a BGU strategy works twofold: risk can be kept to a minimum by trying to buy as close to the intraday low (your selling guide, plus 1-3% for downside porosity as desired) and then using it as a selling guide. Secondly, if we see a range of BGUs among semis, telecoms, and other beneficiaries of the weekend trade news (such as agricultural names) that quickly fail, then we have some idea that the rally will be still-born.

Elsewhere on our list, we note that ShockWave Medical (SWAV) has posted an undercut & rally (U&R) long set-up by pushing above its prior lows in the base. It also closed six cents above the 10-dma, so can also be viewed as a pocket pivot. The prior lows around 55 would remain your selling guides.

Rare-earth metals play Tronox Holdings (TROX) moved to higher highs as it comes up the right side of a potential cup formation. Last weekend we noted that the stock was holding tight alongits 10-dma, 20-dema, and 200-dma as it posted several five- and ten-day pocket pivots. This was constructive action, and represented a lower-risk entry last weekend per our report at that time. Now the stock is extended after posting another pocket pivot on Thursday that cleared the 50-dma on above-average volume. Volume expanded again on Friday as the stock continued higher, and TROX is now extended. Look for any retests of the 50-dma or the rapidly-rising 10-dma and 20-dema as potential lower-risk entries, but the proper entry was along the 10-dma, 20-dema, and 200-dma on Monday and Tuesday of this past week as the stock sat there, waiting to be plucked, per our report of last weekend.

Elsewhere on the list, CMG, LULU, TEAM, and ZS all appear to be in lower-risk entry positons using the 10-dma or 20-dema as a tight selling guide. We are also watching CYBR, which has been stuck below its 50-dma in a tight flag formation, for any move back above its 50-dma with would trigger a long entry at that point while using the 50-dma as a selling guide. Facebook (FB) has survived the scorn of regulators and politicians to form a cup-with-handle formation. While it has seen some high-volume selling in the handle and near the highs of its pattern, it has since pulled into its 10-dma on a voodoo volume signature which looks constructive. Watch for FB to potentially gap out of this base tomorrow.

At the time of this writing, futures have yet to open on Sunday. Nevertheless, Monday is likely to be an interesting day as we will get to see how the market parses out all the developments with respect to the U.S.-China trade "cease-fire" and how this all weighs against a slowing global economy and the corresponding actions and responses from global central banks, most importantly the Fed. Have a good trading week, and Happy July 4th!
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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