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VoSI Market & Report Watch List Review for the Week Ended October 11, 2019

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.

General Observations: 
News-related volatility drove the market action this past week, with the major market indexes finishing on Friday with a gap-up move back up through their 50-day moving averages. The move came on optimism regarding a U.S.-China "mini-trade deal" but was sold into in the last 15 minutes of the trading day once the details were announced. The trade deal offers nothing concrete, other than a "Phase One" agreement that will take 3-5 weeks to write, according to the President, but no details regarding enforcement specifics and the other alleged phases was forthcoming. Also, no discussion of rolling back current tariffs was mentioned, and the only tariff concession was that the U.S. would not go through with additional tariff increases scheduled to take affect next week.


The Market Direction Model (MDM) remains on a cash signal.

Three names remain on the Report Watch List, but it is interesting to see that all three have rallied this past week after posting undercut & rally (U&R) long set-ups and entries several days ago. We can see Chipotle Mexican Grill (CMG) has rallied back up to the highs of its current base after posting a U&R long entry on Tuesday of this past week. It then stalled badly on Friday on volume that was 2% above average. This mostly demonstrates the utility of the U&R as a favored long entry set-up that is preferable to buying new-high breakouts. Generally, the fastest, highest time-value moves in this market will occur on U&Rs from beaten-down chart positions.


The same assessment applies to Lululemon Athletica (LULU), which posted a U&R long set-up at its 50-dma seven trading days ago. It is now streaking back up to its highs on above-average volume, but is certainly extended at this point. Even if it continued past the left-side peak of this formation in a new-high breakout it would be far too extended for us to consider purchasing. The U&R is always the tightest entry, since the general rule is to use a 7-8% stop on a new-high breakout while a U&R simply uses the prior low as a selling guide, which is generally far less than 7-8%, and often below 3%.


Software name Manhattan Associates (MANH) has bucked the severe selling seen in most cloud/software-related names. It posted a U&R nearly two weeks ago and is now stalling near its prior highs. Again, the U&R is your preferred entry vs. waiting for or acting upon a new-high breakout.


These three stocks are good examples and references for what to look for when it comes to finding and acting upon the U&R long set-up. U&Rs are often excellent swing-trading entries which tend to work best when the market becomes sharply oversold on a near-term basis.


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. ©2019 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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