Indices are getting overbought, we had a very nice rally since start of the year, 5 straight week we have been UP UP & UP.
Let us look @ RSI picture of various sector of this market, and they are :
Nasdaq 61.38
SOX 62.41
DOW 63.45
S&P 500 63.93
RUT 64.13
Most of the above have risen from below 30 near the end of the year, I have found RSI as a very good indicator of predicting " major turning point " and it gives me a clear signal that things are all set to reverse irrespective of bullish or bearish noise.
Obviously quick money has been made already, FDN Dow Internet index is UP 13.42% in January alone, that is well above historical average gain of 8% in a year
As this is the start of the month, there is a chance of money inflow which may push most indices into deeply overbought situation.
We are approaching or have reached major resistance of 200 DMA which needs to be monitored.
Technically speaking SOX is the most vulnerable.
Russell has lot of room from 200 DMA which is a good area to look.
DOW, S&P 500 & Nasdaq are all approaching 200 DMA a major resistance area.
Investor sentiment is getting euphoric based on Fed reversal, this aspect has been played out already and may be priced in.
China & US trade talks has a deadline of end of March, it is left to be seen IF enough progress is being made, @ the conclusion of each meeting there is carefully worded optimistic picture is given, but when they both reached their base, cautionary statement and highlighting differences emerges.
Bottom line is, it is better to wait out 2 weeks before putting new ideas to work generally speaking, it looks very " calm before pullbacks "
Some technician are of the opinion that, this a bear market rally and is ready for reversal.
Good luck with your own interpretation of this market and your comfort level.
BLOG does NOT give buy or sell.
Saleem
9 comments:
Hi Saleem,
Last week: -1.03% (YTD: -0.62%)
Notable Winners: ORTX SAIL MHO VRNS
Notable Losers: VICR VCEL GRTS LQDA
It was another underperforming week for me, mostly due to VICR's collapse, but also continued small biotech weakness. Additionally, I've missed out on a lot of positive performance due to trimming my cloud exposure too early as well as letting go of my TNA before the Fed meeting only to have to buy it back later. I have been reluctant to accept the full scope of the Fed's thought pivot on rates here, and that has hurt me the whole year. This is a very broad rally, and I think TNA remains one of the best ways to play that. I am the most diversified as I've been in many months.
Holdings: TNA SAIL URI ORTX HEAR EMN VICR TDOC TWST GRTS NIU TRIL LQDA, cash 0.0%
Stocktrader
Hi Saleem,
Sold the rest of my little position in LQDA @ 13.82
I have too much exposure to biotech and I continue to see sellers come into the name.
Stocktrader
Hi Saleem,
Sold SAIL @ 30.30 to take profits
Stocktrader
Hi Saleem,
Bought ANGI @ 17.10
I think the chart sets up for a big breakout if things go well, especially with the short interest. A buy initiation by Goldman Sachs today could provide the spark as it talked about the huge addressable market in a currently fragmented industry. It spoke to me haha :)
Stocktrader
Hi Stocktrader,
Last week UP 20.99%
YTD UP 95.67%
Saleem
Hi Stocktrader,
Good luck with ANGI
Saleem
Hi Saleem,
Those numbers are so incredible. I am so happy for you!
What an amazing way to start the year--I hope things continue to go so very well for you :)
Stocktrader
Hi Stocktrader,
Thanks for your feedback on YTD numbers.
I am really getting scared of giving up on these gains, thus my low exposure.
Saleem
Really solid start Saleem. Congratulations! Let's keep it this way.
Paramjeet
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