Week 38 Market Roundup — more demand and a crucial week ahead
Last Sunday in my Week 37 Market Roundup, I discussed the scenarios of a crash, further correction and bull signs. As expected, S&P 500 had a relieved rally after the exhaustion of the down momentum. Yet it only tested the upper range the trading range near 3425 before it lost the up momentum and have another down swing to test the low at 3300. So far, the trading range between 3300–3425 is still in play.
Based on the character of the rally we had last week (on Monday & Tuesday), it suggested a weak bull. On the bullish sign, comparing 17–18 Sep’s price spread (highlighted in orange) with 10–11 Sep’s (highlighted in blue), there are more demand come in on 17–18 Sep as S&P 500 did not commit below the support level at 3300, suggested a potential rally ahead.
Next week will be crucial as it should reveal more clues if S&P 500 will have further correction ahead to test the next support zone 3125–3300. If it fails to commit above 3425 (with the anticipated rally coming week), it will likely to break 3300 with more weakness ahead upon emergence of increasing supply.
So far, RUSSELL 2000 outperforms the rest of the indices as shown in the chart below. Take advantage of the small cap stocks for possible long entry if you are trading on the long side. NASDAQ is the worst, followed by S&P 500 and the Dow Jones. It does make sense to have a rotation into the laggard (in this case is RUSSELL 2000) after the impressive run in NASDAQ since Mar 2020.
Check out last week market analysis video series below if you haven’t or would like to reflect on how last week unfold together with your preparation and analysis:
Market analysis on 14 Sep 2020 - using volume spread analysis to qualify reversal trade
Market analysis on 15 Sep 2020 - simple trade management strategy to maximize profit
Market analysis on 16 Sep 2020 - the easiest way to avoid unnecessary losses
Market analysis on 17 Sep 2020 - how to trade the rising wedge pattern with high winning
Market analysis on 18 Sep 2020 - How to profit from rising wedge pattern - Day trading S&P 500
Stock Watchlist — Malaysia
VS (V.S INDUSTRY BHD) — Last week VS had a strong rebound followed by a mild reaction with decreasing supply, which is constructive for the uptrend. Trading range between 1.75–2.1 is expected.
JHM (JHM CONSOLIDATION BHD) — similar to VS, supply has been decreasing for JHM. It should attempt to test the resistance at 1.77, followed by 1.9.
REVENUE (REVENUE GROUP BERHAD) — Again, supply has been low for REVENUE. It should attempt to test 1.3 followed by 1.4 for a bullish case. Still within the trading range between 1.2–1.4.
COMFORT (COMFORT GLOVES BERHAD) — COMFORT failed to commit above 4. More weakness to be expected ahead.
ADVENTA (ADVENTA BHD) — Similarly, ADVENTA failed to commit above 2.5. More weakness to be expected ahead.
FRONTKN (FRONTKEN CORPORATION BHD) — It is still within the trading range between 3.25–3.8. Supply level is still relatively high. More time is required to absorb the supply.
FFPGROUP (FOUNDPAC GROUP BERHAD) — it is one of the laggards in the technology sector. A weak rally followed by a reaction with slight increasing supply. Demand is of poor quality. The next support level is at 0.9–0.95.
MI (MI TECHNOVATION BERHAD) — A nice rally followed by a mild reaction last week with decreasing supply. A trading range between 3.7–4.4.
Stock Watchlist — US
MSFT (MICROSOFT) — Support at 198 was tested and rebounded last Friday. 211 is the immediate resistance to overcome. Else, it will have further weakness when the NASDAQ back to its correction mode.
FB (FACEBOOK) — Support at 250 was tested. There was increasing of supply in the reaction from last week. A failure to overcome 266 should see further weakness ahead and likely to test 220–240.
IBB (Biotechnology ETF) — After tested 125, IBB had a strong rally up. Currently attempt to break above the resistance zone near 136. If it can stay within the zone 133–136, it should attempt to test the resistance at 146.
SE (SEA Limited) — Supply level is generally low with the price holding up. Trading range between 130–164. A strong stock than the NASDAQ.
JD (JD.com) — It is still in a correction mode. The support area is at 68–73. Resistance is at 78.
NET (CLOUDFLARE) — 38 is the next important resistance to overcome to violate the distribution scenario. A break below 33 would see capitulation.
NASDAQ:LVGO (LIVONGO HEALTH) — Low level of supply with a trading range between 111–150.
PTON (PELOTON) — A trading range between 70–98. More time is required to absorb the supply.
BABA (Alibaba Group Holdings) — hold up above support area at 260–267. Still in a backup action phase after a sign of strength breakout rally.
BTG (B2GOLD CORP) — BTG rallied up higher. If it can hold above 6.5, it should carry on its momentum to test 7.3. Supply spike on last Friday. Need to watch how it resolves.
FSLY (FASTLY INC) — trading range between 74–102 with decreasing supply. Looks promising to at least test the resistance.
SQ (SQUARE INC) — As expected, it tested 158 last week before a reaction kicked in. A trading range between 134–158
APPS — it broke out from the small accumulation range after the supply absorption last week. 29.5 is the immediate support level.
Study their charts and you should find them interesting in terms of price structure and volume signature.
Disclaimer: The information in this presentation is solely for educational purpose and should not be taken as investment advice.
Based on the character of the rally we had last week (on Monday & Tuesday), it suggested a weak bull. On the bullish sign, comparing 17–18 Sep’s price spread (highlighted in orange) with 10–11 Sep’s (highlighted in blue), there are more demand come in on 17–18 Sep as S&P 500 did not commit below the support level at 3300, suggested a potential rally ahead.
Next week will be crucial as it should reveal more clues if S&P 500 will have further correction ahead to test the next support zone 3125–3300. If it fails to commit above 3425 (with the anticipated rally coming week), it will likely to break 3300 with more weakness ahead upon emergence of increasing supply.
So far, RUSSELL 2000 outperforms the rest of the indices as shown in the chart below. Take advantage of the small cap stocks for possible long entry if you are trading on the long side. NASDAQ is the worst, followed by S&P 500 and the Dow Jones. It does make sense to have a rotation into the laggard (in this case is RUSSELL 2000) after the impressive run in NASDAQ since Mar 2020.
Check out last week market analysis video series below if you haven’t or would like to reflect on how last week unfold together with your preparation and analysis:
Market analysis on 14 Sep 2020 - using volume spread analysis to qualify reversal trade
Market analysis on 15 Sep 2020 - simple trade management strategy to maximize profit
Market analysis on 16 Sep 2020 - the easiest way to avoid unnecessary losses
Market analysis on 17 Sep 2020 - how to trade the rising wedge pattern with high winning
Market analysis on 18 Sep 2020 - How to profit from rising wedge pattern - Day trading S&P 500
Stock Watchlist — Malaysia
VS (V.S INDUSTRY BHD) — Last week VS had a strong rebound followed by a mild reaction with decreasing supply, which is constructive for the uptrend. Trading range between 1.75–2.1 is expected.JHM (JHM CONSOLIDATION BHD) — similar to VS, supply has been decreasing for JHM. It should attempt to test the resistance at 1.77, followed by 1.9.REVENUE (REVENUE GROUP BERHAD) — Again, supply has been low for REVENUE. It should attempt to test 1.3 followed by 1.4 for a bullish case. Still within the trading range between 1.2–1.4.COMFORT (COMFORT GLOVES BERHAD) — COMFORT failed to commit above 4. More weakness to be expected ahead.ADVENTA (ADVENTA BHD) — Similarly, ADVENTA failed to commit above 2.5. More weakness to be expected ahead.FRONTKN (FRONTKEN CORPORATION BHD) — It is still within the trading range between 3.25–3.8. Supply level is still relatively high. More time is required to absorb the supply.FFPGROUP (FOUNDPAC GROUP BERHAD) — it is one of the laggards in the technology sector. A weak rally followed by a reaction with slight increasing supply. Demand is of poor quality. The next support level is at 0.9–0.95.
MI (MI TECHNOVATION BERHAD) — A nice rally followed by a mild reaction last week with decreasing supply. A trading range between 3.7–4.4.Stock Watchlist — US
MSFT (MICROSOFT) — Support at 198 was tested and rebounded last Friday. 211 is the immediate resistance to overcome. Else, it will have further weakness when the NASDAQ back to its correction mode.FB (FACEBOOK) — Support at 250 was tested. There was increasing of supply in the reaction from last week. A failure to overcome 266 should see further weakness ahead and likely to test 220–240.IBB (Biotechnology ETF) — After tested 125, IBB had a strong rally up. Currently attempt to break above the resistance zone near 136. If it can stay within the zone 133–136, it should attempt to test the resistance at 146.SE (SEA Limited) — Supply level is generally low with the price holding up. Trading range between 130–164. A strong stock than the NASDAQ.JD (JD.com) — It is still in a correction mode. The support area is at 68–73. Resistance is at 78.NET (CLOUDFLARE) — 38 is the next important resistance to overcome to violate the distribution scenario. A break below 33 would see capitulation.NASDAQ:LVGO (LIVONGO HEALTH) — Low level of supply with a trading range between 111–150.
PTON (PELOTON) — A trading range between 70–98. More time is required to absorb the supply.BABA (Alibaba Group Holdings) — hold up above support area at 260–267. Still in a backup action phase after a sign of strength breakout rally.BTG (B2GOLD CORP) — BTG rallied up higher. If it can hold above 6.5, it should carry on its momentum to test 7.3. Supply spike on last Friday. Need to watch how it resolves.FSLY (FASTLY INC) — trading range between 74–102 with decreasing supply. Looks promising to at least test the resistance.SQ (SQUARE INC) — As expected, it tested 158 last week before a reaction kicked in. A trading range between 134–158APPS — it broke out from the small accumulation range after the supply absorption last week. 29.5 is the immediate support level.Study their charts and you should find them interesting in terms of price structure and volume signature.
Disclaimer: The information in this presentation is solely for educational purpose and should not be taken as investment advice.
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