Uptrend or Chop? Stock Market Outlook

Jul 25, 2022

Hi everyone,

Welcome to week 6 of ∞ that I will be posting my stock market outlook, analyzing the general market, leadership groups, and select stocks.

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The Indexes

This past week the indexes continued to move higher breaking through short term resistance. However, on Friday we saw a downside reversal with many individual stocks following suit.

Daily Chart of the QQQ:

We are pushed up right against the prior consolidation which is a point of potential resistance. Some sideways consolidation here above the 50 sma would be very constructive.

On the shorter term timeframe we are making higher highs and higher lows above most rising moving averages although we broke below the 10 period moving average.

QQQ 65 minute chart:

With respect to the longer term trend we remain below a declining 30 week/ 200 day moving average.

Weekly chart of the QQQ:

In terms of the general market we still have quite a bit of work to do in order to resume a longer term uptrend. It’s still an environment where progressive exposure is critical and you should focus only on A+ setups and manage risk tightly.

Leadership Groups

We’ve seen a slight improvement in breadth although Biotech and Medical/ Healthcare remain the largest theme I see.

Top industry groups per MarketSmith:

Top Stocks:

Some of the top stocks I am watching. There are not many prime setups for Monday. We’ll see how those downside reversals resolve themselves.

SWAV
GTLB
MCK
ENPH
CELH
LNTH
HALO
VRTX
UTHR

Let me know your top 3 ideas in the comments below

Sentiment

It was interesting how negative my sentiment survey turned despite the overall strong week. Remember this is a secondary indicator to price action.

Stock Market Outlook

My current stock market outlook is still a tentative uptrend. Practice strict risk management and only add exposure if pilot positions are working. Keep in mind the overall context.

This week we have many important earnings reports and news events. Stay nimble!

From Earnings Whispers:

I hope you found this article helpful! Also, Let me know your thoughts on the market in the comments below

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