Want to start the week ahead of the pack? Check out Momentum Mondays, where I cover the leading breakout stocks in the market, summarize the major events of the week ahead, and prepare investors for profitable trading.
Today, we will be taking a look at the broad stock market indexes to summarize the action of the last few weeks, then we will look at theeconomic calendarand earnings releases to address any market moving data coming our way. And finally, I will share four compelling technical trade setups in stocks with top Zacks Ranks.
The Economic and Earnings Calendar
Investors can expect some interesting action this week in the market as there are some critical economic data releases and quarterly earnings meetings.
We have Fed speakers throughout the week which can always throw a wrench at the market, especially now that we have some shifting expectations regarding interest rate policy.
Also, CPI and Core CPI inflation data on Wednesday will of course be an important data point for policymakers and investors alike. Then on Thursday morning we get initial jobless claims, and Friday PPI, and Core PPI.
Earnings reports are numerous this week, with calls from Artista Networks, Coca-Cola, Shopify, Occidental Petroleum, Applied Materials and many more.
Equities Rally, Semiconductors Lead
Equity indexes continue to press higher powered by some truly epic moves in Semiconductor stocks. Nvidia, Super Micro Computer, and ARM Holdings have made incredible moves in just the first six weeks of the year.
It seems the market is still in the early stages of pricing in the Artificial Intelligence boom.
The Nasdaq 100 QQQ broke higher from this bull flag last week and looks like it could trade all the way up to that upper bound. I am using this channel to measure sentiment.
Image Source: TradingView
Technical Setups
This week’s theme is earnings gaps and bull flags. Each of the stocks I share here today have experienced strong gaps higher following earnings, followed by sideways action. This is a fantastic setup for high probability trading. Odds of a winning trade are enhanced by the fact that all these stocks are also rated, Zacks Rank #1 (Strong Buy).
Today, I am showing two more defensive stocks and two more aggressive stocks. If we do get some weaker action in the broad market, the defensive names should outperform, and if the market continues to rally, the aggressive names should outperform.
Below, we can see the chart for Clorox CLX. If Clorox stock can trade above the $154.20 level it would signal a breakout. However, if it can’t hold above the level of support at $152.60, the setup is invalid.
Image Source: TradingView
This is the price action chart for HCA Healthcare HCA. HCA Healthcare has formed a prototypical bull flag and is on the verge of breaking out. Above $308 and the stock should make a swift move higher. But below $302 and investors may want to look for other options.
Image Source: TradingView
Below, we see a compelling technical chart pattern in Netflix NFLX. Netflix stock has also formed a convincing technical bull flag. Above $566 and the breakout is confirmed. Below $550 though and we may need to wait for another opportunity.
Image Source: TradingView
Meta Platforms META continues to form bullish patterns even after an incredible 18-month performance. Like the others, it notched a large earnings gap up and is forming a bullish pattern. Above $474.40 and the breakout should draw in even more buyers. Alternatively, if it reverses, or breaks down below $453, it would be wise to wait for another setup.
Image Source: TradingView
Bottom Line
The Crucial Role of Trading Plans and Risk Management in Stock Trading
In the volatile world of stock trading, even the most promising setups can falter. That’s why it remains imperative for traders to prioritize the formulation of a sound trading plan, adhere to it unwaveringly, and implement stringent risk management protocols.
May fortune favor you this week, fellow traders!
Zacks Top 10 Stocks for 2024
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