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VoSI Market & Report Watch List Review for the Week Ended May 3, 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 and which have been deemed suitable for inclusion on the List. 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 posted a new all-time closing high on Friday. The major market indexes, however, spent the week chopping back and forth within a narrow range, selling off on a bearish reversal after the Fed meeting on Wednesday. However, the indexes and leading stocks found their feet at logical areas of support, with the NASDAQ holding near-term support at its 20-dema. The market trend remains intact, and the Market Direction Model (MDM) remains on a buy signal.

Removed from the List this Week: 

Focus List Stocks Expected to Report Earnings this Week: Invitae (NVTA) and Wingstop (WING) on Tuesday after the close, and IAC/Interactive (IAC) on Wednesday after the close. We will also be watching Roku (ROKU) very closely when it reports earnings on Wednesday after the close, although it is currently not included on the Report Watch List above. Note that the list is also sorted by nearest earnings report date first for easy reference.

Notable Action: 
We reported on Funko (FNKO) on Friday as a buyable gap-up (BGU), but the gap move failed and the stock ended the day as a staling pocket pivot as it came all the way in to close near its intraday low fill the gap. The company has outstanding fundamentals, with whopping 433% earnings growth reported in the most recent quarter. While the BGU was negated, this still qualifies as a pocket pivot at the 50-dma, and can be tested on the long side here while keeping risk to a minimum by using the 50-dma as a tight selling guide.

Advanced Micro Devices (AMD) reported earnings Tuesday after the close and gapped up on Wednesday morning. We did not issue a buyable gap-up report, however, and this turned out to be prescient as the stock pulled a big outside reversal to the downside on heavy volume. However, on Thursday, AMD found its feet at the lows of its current four-week base and then rallied after undercutting the prior 26.96 low in the pattern from mid-April. Once it cleared that price level it triggered an undercut & rally, or U&R, long entry at that point. On Friday, AMD acted quite constructively as it held support along its 20-dema with volume drying up. This puts it in a lower-risk entry position here using the 20-dema as a tight selling guide.

Viavi Solutions (VIAV) reported 0% earnings growth on Thursday after the close, but the market focused on fact that it exceeded earnings estimates by a penny, so the 0% earnings growth was already a known quantity before the report. This sent the stock on a standard-issue base breakout on very strong volume. This remains within buy range as a base breakout.

Facebook (FB), not shown on a chart, remains within buying range of its recent buyable gap-up after earnings. The intraday low of the BGU day is at 192.12, although the stock has dipped less than 2% below that a couple of times over the past week. This is allowable downside porosity, however.

Momo (MOMO) illustrates the concept of taking an opportunistic approach in this current market environment. The stock gapped down on Monday on news that that certain mobile app stores in China had removed its Tantan mobile app on direction of governmental authorities in China. Volume was heavy, but the stock quickly found its feet and rallied back above two prior lows in the pattern on Tuesday, triggering undercut & rally long set-ups at that point. The stock is now back above its 50-dma with earnings expected on May 28th.

World Wrestling Entertainment (WWE) gapped down hard after reporting earnings last week, taking all the way back to price levels at which we first reported on the stock when it was posting several pocket pivots along the 50-dma and the 83.86 prior low in the pattern. Note that it has now rallied slowly above the prior 83.86 low in the pattern to close at 85.80 on Friday. One could, in theory test this as a U&R long entry here using the 83.86 prior low as a tight selling guide. The other possibility is that the stock will retest the 200-dma, and our view is that if it can indeed hold support at the 200-dma it may remain viable.

It has been quite characteristic of this market that when a stock goes down big on heavy volume that often marks the extent of the damage, and the stock begins to rally again, usually in conjunction with a concrete Ugly Duckling type of long set-up such as a U&R long trigger, a simple but successful test of support at a key moving average, or otherwise. Note that while annual earnings will slacken in 2019 at $1.04, 2020 earnings are expected to subsequently grow 195% to $3.07 a share.

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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