The market ended last Friday with high volatility despite the holiday weekend. The S&P 500 (ES) dropped from its high at $4,740.50 to the low of the day due to the new COVID-19 variant that temporarily spooked the market.
We don’t expect the day-to-day shocks to end anytime soon as the market will continue to react to certain COVID-19 news. If the market gets conditioned to the news, we might not see as much action as we did on Friday but won’t be surprised by future reactions.
If negative news is released, we could very likely see fear trickle into the market. We’ll keep reacting to the looming catalyst day-by-day.
One thing we can do is rely on the technicals. On Monday the ES had a relatively green day, engulfing almost half of Friday’s drop. We are still in a volatile market, so it’s important we have compasses that we can follow including the 50 simple moving average (SMA), daily mean, and daily squeeze.
Here is our focused list:
GOOGL — Kissed the trendline and 50 simple moving average (SMA) on Friday for the third time since October. Be patient, and if GOOGL can’t break through the daily mean at $2,850 it could drop below the trendline to $2,800. GOOGL currently sits in a daily squeeze and if it can break through the daily mean, the squeeze could fire to the upside through point of control (POC) at $2,909 to the $2,980 range.
MRNA — Gapped above and held the daily Ichimoku Cloud on Monday. MRNA is approaching the flat top line of resistance on the Ichimoku Cloud at $375. If it rips through the daily Ichimoku Cloud at $380, MRNA could reach $400. It could also get rejected and pull back for a quick short opportunity to POC at $343 or the 50 SMA at $322.
NVDA — Sitting at the highs in a 4-hour squeeze. While NVDA is extended, if it can squeeze and break through its all-time high (ATH) at $346 we could see it rally higher. We could see a dip buy opportunity if NVDA drops to $330 or to POC at $323.
SHOP — Currently trading at the daily mean. As long as it holds $1,540 there is a potential dip buy opportunity to $1,600 and $1,660 this week, and potentially farther through $1,700. Look to buy SHOP low and sell it high.
Stay Focused!