Gap Down But Decent Close- Chop Begins?
Hi everyone,
I hope you are having a great Tuesday!
In this post I’ll concisely share my thoughts on the day’s action. And share a bunch of stock charts that caught my eye.
Now let’s dive in ↓
Market Action
The QQQ followed through down sharply in the morning but closed mid range abvoe the 21 ema
IWO gap was more severe
Trends ( Based on QQQ)
Shortest - 5 Day SMA - Down - Below Declining
Short-term - 21 ema - Up - Above Rising
Intermediate term - 50 sma - Up - Above Rising
Longterm - 200 sma - Up - Above Rising
Group/Themes Action
Pressure on the WL and Semis in particular in the morning. Most closed red. Mixed Closing Ranges
Daily Performance charts from the open:
Key Stocks in Deepvue
SMCI followed through down then closed near the open. Volatility remains high
NVDA weakness. Still holding the 21ema but could signal chop or a change in trend
APP watching for a range to form
AMD also a weak day. See if it finds support near the base lows.
COIN forming a handle? Decent close
MSTR and RIOT with similar charts
SHAK holding up really well inside.
CELH forming a range here
NET weak since the gap up but strong close today
PLTR one to watch. Gap down but decent close
Market Thoughts
The close was decent but many names took shots today. Semis have been leading and we will have to see how NVDA handles earnings. Have a list of the top quality names that you would want to buy if they setup amid/after this weakness.
Reminder:
Risk Management is Paramount
Refuse to enter randomly without managing risk and wait for the spots to develop, they will. Stocks during strong moves always pull back to the 21 ema, 50 sma multiple times. Look for a tight and logical entry point.
Have patience, focus on the best stocks with the greatest potential. These will telegraph the rest of the market.
Take it day by day and manage risk along the way. Be ready for anything
What are your thoughts on today’s action? (Leave a comment below)
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Cheers!
Richard
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There are several price cycle phases taking place today, namely Exhaustion Extensions for NVDA and SMCI and others. It’s interesting to start left and read right to capture them including Reversal Extensions, Base n’ Breaks, Wedge Pops and Drops, and EMA Crossbacks.
The Price Action Cycle material by Oliver Kell is quite helpful to identify these. And thank you for pointing me in this direction. Trade well