The market is extended ever since its reversal, rallying off the lows for about 37 days now with the S&P 500 (ES) up about 400+ points. The S&P 500 is trading above the 3+ average true range (ATR) which is the second time we’ve seen these types of exhaustion levels this year.
Be patient with the market and look for the squeezes to give you some direction. While we would love to take advantage of a pullback, the market has continued to rally higher so we need to continue to react according to what the market gives. Avoid having a strong bias of one direction or another.
Here is our focused list:
GOOGL — Strong push to all-time highs (ATH) last week and continued on Monday. Squeeze starting to form, looking for it to pop. Use the 1-hour Ichimoku Cloud as an indicator to watch along with the $2,973 zone. Look for the squeeze to pop to the upside and for GOOGL to break $3,000 up to $3,050.
NVDA — Very extended, trading above 3+ ATR at around 5+ ATR, while point of control (POC) increased to $308. The Artificial Intelligence conference on Tuesday could be a catalyst for either direction. The 2-hour squeeze and hourly squeeze are forming, so we could see a short-term breakout through $314 as long as NVDA continues squeezing tight.
SHOP — Had a strong rally last week but sold off at the end of day on Monday. The weekly squeeze is showing strong momentum and compression which could lead to a move higher. Be patient to see if SHOP pulls back to $1,500 for a dip-buy opportunity.
QCOM — Huge breakout to ATH on Friday and chopped near the highs on Monday. If QCOM keeps trading below the highs with a squeeze, keep an eye out for a breakout to $170.
Stay Focused!