US stock market has been on a tear, completed V turn from March 23rd low to 5th June close...a remarkable pace.
Nasdaq made a new all time high of 9845.69.......nobody could have predicted this 11 weeks ago...
SOX also made a new all time high of 2030.47......
SO Nasdaq & SOX are the superstars of this V turn......
Nasdaq & SOX have made a " golden cross " also......
All of the major indices are above 50 DMA & 200 DMA including Russell 2000
All of the above are major technical milestones.......
All this good news calls for some analysis of risk / reward ratio going forward....
When I want to analyze market deeper, then I look to my trusted RSI ...which is as follows :
DOW 74.04
S&P 500 72.48
XLE 71.70
IWM 70.95
Nasdaq 70.95
SOX 69.51
TAN 66.52
GLD 42.69
Looking @ above RSI numbers, risk has increased substantially for pullbacks / sideways move in many sectors, anything above 70 RSI is considered overbought and is taken as contrary indicator irrespective of jubilation / euphoria.
The question is are we going to fight for last $$ or book gains and wait for better RSI numbers.
Ironically Gold is looking much better based on RSI of 42.69...30 RSI is considered oversold and we are very close to it.....
BUT markets gives you a sense of " nothing can go wrong because I am so good @ making money syndrome...a sure sign of TOP....
Sentiment which is extremely bullish " always is near top " is rampant enthusiasm for everything going right for economic resurgence......
BUT a bigger question is..... are we justified in making new all time high in Nasdaq & SOX...is profit growing faster than previous high environment?
Answer is " absolutely NOT "
This is where Risk / reward ratio comes into play......
YES...market could go further UP based on new allocation to equities........
Then we are more vulnerable to a quick U turn in market.....
Hopefully we are all looking @ our exposure lot closely while going is good....a major reduction in exposure is " highly recommended "
Stay with very high comfort / high conviction stocks only.....
Good luck with your own analysis & comfort level.
BLOG does NOT give buy or sell.
Saleem
18 comments:
Hi Stocktrader,
Bought GOLD @ $23.46 in pre market.
Saleem
Hi Saleem,
Good luck with GOLD!
I think I like the miners here better than the metal. Every company is finding good ways to cut costs and improve profitability - an important thing to remember for the market as a whole actually!
Stocktrader
Hi Saleem,
Last week: +4.21% (YTD: +32.42%)
Notable Winners: LYFT PSNL SQ BHVN PINS WEN
Notable Losers: AKAM ADPT AVYA
There was a large disparity in winners and losers this week as some NASDAQ stocks had tougher times during this fierce rotation. I'm not sure I'm staying correctly positioned, but the portfolio performance bracketed the S&P and NASDAQ well last week. The market seems to be in somewhat of a blowoff phase with double digit % moves in stocks becoming "too normal". That said, it is painful to not participate, so I'm trying to stay somewhat diversified and sticking with my comfortable names.
Holdings: PINS NXPI DDOG GTLS WEN SQ AKAM ENPH LOW GH SAIL ADPT BHVN PSNL AVYA, cash 0.0%
Stocktrader
Hi Folks,
Sold DDOG @ 71
Sold AVYA @ 14.15
Bought ICD @ 7.81
Thanks
Paramjeet
Hi Paramjeet,
Good luck with re-positioning.
I saw DKNG under 36 this morning, but couldn't find a position I wanted to sell. Hopefully I still have chances to get a good price there for what should be a fantastic long term story...
Stocktrader
Hi Stocktrader,
I had bought GAN little sooner that I should. Hoping it will move up soon.
I sold some other key players
CHGG @ 57
Bought AEY @ 2.50
Thanks
Paramjeet
Hi Stocktrader,
Last week UP 49.19%
YTD UP 54.20%
Saleem
Wow!! What a week, Saleem. It beat my best week from few week's back. You are ranked #1 now for best week performance. :)
Thanks for sharing
Paramjeet
Hi Paramjeet,
Appreciated your feedback!
Saleem
Hi Stocktrader & Paramjeet,
Bought SHOP @ $715.00
Saleem
Hi Saleem,
Unbelievable week - only possible with your high conviction!
Good luck with SHOP!
Many of these growth stocks are seeing short-term sale prices.
Stocktrader
Hi Saleem,
Sold GTLS @ 49.86 to take profits
It's not a long term thesis for me, so I'll take the short term money and run!
Stocktrader
Hi Stocktrader Paramjeet,
Good luck with your strategy with buy and sell.
Saleem
Hi Saleem,
Bought QLYS @ 106.49 for mostly a trade
Good valuation, takeover rumors, and high short interest make this interesting here.
Stocktrader
Hi Stocktrader,
Your research is amazing, always in-depth and up-to-date with juicy conclusion.
Good luck with QLYS....
Saleem
Hi Guys,
Sold ENPH @ 52.51
Sold TLRY @ 10.11
Bought ACOR @ 0.93
Finally entered into Energy sector stock today - IDC and Distribution service stock AEY. Both of them doing alright.
GAN and CATS finally showing some life along with VIR and CLVS
ONEM, NVAX and ALT are laggards.
Thanks
Paramjeet
Hi Stocktrader Paramjeet
Added 50% SU @ $21.22
Saleem
Hi Stocktrader and Saleem,
I sold AEY. Had to sell after 45% gain in a day.
Bought LK at 4.80 AH
Thanks
Paramjeet
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