Trading Plan: 5 May 2022

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Indexes
  1. In the news
  2. Sectors
  3. Sentiment
  4. Breadth
  5. Earnings Reports

Nasdaq (+3.19%) closed in green with higher volumes. After the FED meeting when the anticipated rate hike was confirmed, the market began its rally. Next step: watching EMA21 and SMA50.

SP-500 (+2.99%) came back strongly from the lows and closed at the high with important volumes. Watching the EMA21 and SMA50 as the next checkpoints.

In the news

The Federal Reserve increased its benchmark interest rate by half a percentage point, in line with market expectations.

Dow rallies 900 points as investors bet the Fed can slow inflation without causing a recession.

Bitcoin jumps to $40,000 after Fed chair Powell rules out bigger rate hikes.

France becomes the first big European nation to grant crypto giant Binance regulatory approval.

Facebook plans to reduce hiring as revenue growth slows and inflation concerns increase.

Self-driving cars will need smarter roadways.

Sectors

  • Best yesterday sector: Energy, then Communication Services. Worst sector: Real Estate.
  • Best weekly sector: Energy, then Communication Services. Worst sector: Real Estate.
  • Best monthly sector: Energy, then Consumer Defensive. Worst sector: Communication Services.

Sentiment

  • NAAIM (weekly, neutral between 70 and 90): 46.25
  • VIX (neutral under 20): 25.42
  • Equity Put / Call Ratio (neutral between 0.7 and 1): 1.05
  • CNN Fear & Greed: 39 (Fear)

Breadth

  • Stocks above SMA40 (neutral between 30 and 80): 40.42%
  • Stocks above SMA200 (neutral above 30): 31.91%
  • Number of stocks that increased yesterday by more than 4%: 701
  • Number of stocks that decreased yesterday by more than 4%: 151
  • McClellan Oscillator (neutral between -100 and 100): 43.34

Earnings Reports

Marathon Digital Holdings, the digital asset tech company, gained 5.84% after reporting that its Q1 revenue increased a whopping 465% YoY. Uber sank 4.65% after announcing in its Q1 report that the company would not make necessary investments to increase its number of drivers. Uber also disclosed a $5.9 billion loss due to the “revaluation of equity investments.” Twilio closed +5.5% and gained another 3.27% after hours on news that the company’s full-year revenue increased 61% YoY. eBay and Etsy drop on weak guidance as the e-commerce crunch continues. Moderna blows out first-quarter earnings expectations, triples Covid vaccine sales

Noteworthy earnings reports for today:

What to trade today

As soon as the pressure was off and Powel started to talk, the market was euphoric. The move is likely to continue and the real task for a trader is to find low-risk entries after the yesterday wide range bars.

Celsius ($CELH) setups quietly and constructively. ATR is declining, volumes are low. A breakout above the black line might work. Stop Loss: 5%.

SilverBow Resources ($SBOW) showed RS (relative strength) recently. If the price continues higher and passes the black line, we might see an advance. Stop Loss: EMA21.

Steel Dynamics ($STDL) respects the averages and a breakout above the black line might occur. Stop Loss: EMA21.

Do your due diligence if or when placing a trade. All ideas stated here are my own and do not represent trading or investment advice.

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