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Week Ahead Stock Watchlist Analysis

Key Concepts:

• Support Lines: Price levels where buying pressure is expected to be strong.
• Moving Averages (50-day, 150-day, 200-day): Indicators of the average price over a specific period, used to identify trends and potential support/resistance levels.
• Volume: The amount of a security that changes hands over a given period of time.
• Breakouts: When a stock price moves above a resistance level.
• Trend Lines: Lines drawn on charts to connect a series of highs or lows, indicating the direction of a trend.
• Falling Knife: A stock that is rapidly declining in price.
• Hodling: Holding a stock for the long term, regardless of price fluctuations.
• Volatility Index (VIX): A measure of market volatility, often referred to as a "fear gauge."
• Consolidation: A period of sideways price movement, indicating a balance between buying and selling pressure.
• Death Cross: A bearish signal that occurs when the 50-day moving average crosses below the 200-day moving average.
• Hammer Candle: A bullish candlestick pattern that forms when a stock declines significantly during the day, but then rallies to close near its opening price.

S&P 500 (SPX)

• Key Points:
  • Rebound on Friday after hitting support line.
  • Volume declining in the last 3 days, suggesting selling exhaustion.
  • Below key moving average lines (150-day and 200-day).
  • Needs to be above 585 to be considered safe.
  • Sell-off driven by politics, not fundamentals.
• Strategy:
  • Buying the index when it's 10% down from long-term moving average line has historically been profitable.
  • Stops should be tight due to political uncertainty.
• Data:
  • Currently 10% down from long-term moving average.
• Quote:
  • "When we're 10% down like we are here in history we've never lost money in the coming I think year or so."

NASDAQ

• Key Points:
  • Below its 200-day moving average line.
  • Historically, buying the NASDAQ below the 200-day moving average has been profitable.
• Strategy:
  • Buying the index is considered a good strategy with a longer time horizon.

Apple (AAPL)

• Key Points:
  • Below the 200-day moving average line.
  • Volume spiked up during the collapse, a danger signal.
  • Volume on the last two red days is elevated.
• Strategy:
  • Not buying Apple at this time.
  • Considered a "falling knife."
• News:
  • Apple is planning to add translation features to AirPods.

Tesla (TSLA)

• Key Points:
  • Below the 50-day, 150-day, and 200-day moving average lines.
  • Volume spiked up on the red candle during the collapse.
  • Volume is declining during the attempted rally.
• Strategy:
  • Too early to buy Tesla.
  • Waiting for the stock to turn up and recover above key moving average lines.
• Example:
  • Illustrates the benefit of selling at the top and buying back lower to increase share count.
  • Selling 100 shares at $480 and buying back at $250 would result in owning 192 shares.
• Quote:
  • "The hodling thing is like the most moronic system that anyone's ever come up with."

Palantir (PLTR)

• Key Points:
  • Weathered the sell-off better than most tech stocks due to positive news flow.
  • Trying to get back above the 50-day moving average line.
  • Volume is flat, indicating no panic selling.
• Past Performance:
  • Successful breakout calls at $22, $33, $51, and $103.
• News:
  • Recent deals with AR and KKR.

Volatility Index (VIX)

• Key Points:
  • When high (above 30), it's a good time to sell.
  • VIX always reverts to its average.
  • Went down 11% yesterday.
• Strategy:
  • Shorting the VIX is a complex trade with high risk and requires a mentor.
  • Use VIX as an indicator of market improvement.

SoFi (SOFI)

• Key Points:
  • Bounced off the 200-day moving average line.
  • Below the 150-day moving average line.
  • Recovery rally has tiny volume.
• Past Performance:
  • Breakout call at $9.50.
• Strategy:
  • Index is a safer place to be than SoFi.

Microsoft (MSFT)

• Key Points:
  • Range-bound for over a year.
  • Broke through the bottom of the range, a bad sign.
  • Below all moving average lines.
  • Experienced a "death cross."
  • Friday rally had the lowest volume in weeks.
• Assessment:
  • Not a bullish setup.

Google (GOOG)

• Key Points:
  • Massive gap down on earnings.
  • Collapsed through the 50-day moving average line.
  • Multiple opportunities to exit the stock.
  • Decent green candle on Friday, but didn't exceed previous days' highs.
  • Volume picked up, but may be due to options expiration.
• Assessment:
  • Tech rally is limping.

PayPal (PYPL)

• Key Points:
  • Beautiful early breakouts.
  • Multiple opportunities to exit the stock.
  • Bounced off the 150-day moving average line, a classic fake recovery move.
  • Below the 200-day moving average line.
  • Consolidating, but with no enthusiasm.
• Assessment:
  • Not the moment to buy.
• Opinion:
  • Fundamentally worth more than the current share price.

Archer Aviation (ACHR)

• Key Points:
  • Up 9%, but a small candle for this volatile stock.
  • Breakout call was successful.
  • Volume is flat.
• News:
  • Partnership with the Department of Defense and Palantir.
• Assessment:
  • Not a buy due to failing rules.

Meta (META)

• Key Points:
  • Monstrous rally up, followed by a big red candle with great volume.
  • Fell off hard, dropped below the 50-day moving average line.
  • Bouncing off the 150-day moving average line.
  • Volume is falling off.
• Candlestick Pattern:
  • Hammer candle, a bullish sign.
• Concern:
  • Missing volume.

Amazon (AMZN)

• Key Points:
  • Gap up, followed by a dip and bounce.
  • Fell through the 150-day moving average line.
  • Consolidation is kicking in.
• Factors:
  • Tariffs are a headwind.
  • Profitability growth comes from AWS and Robotics, not retail.
• Assessment:
  • Consolidation, not a buy signal.

Nvidia (NVDA)

• Key Points:
  • Trading at the same level as in June 2024.
  • Last breakout call was at $100.
  • The 50-day moving average line is crossing over the 150-day moving average line, a very bad sign.
• Assessment:
  • Recovery is not as good as it looks.
  • Volume is coming down.

Rigetti Computing (RGTI)

• Key Points:
  • Up 28%, but a small candle for this volatile stock.
  • Great big green candle, great big volume.
  • Above the 150-day moving average.
  • Below the 50-day moving average line.
• Assessment:
  • Fails one of the rules, so be cautious.
  • Very speculative stock.
• Past Performance:
  • Breakout call at $5.70.

Conclusion

The market is currently experiencing a period of uncertainty and volatility, driven by political factors and economic concerns. While there have been some positive signs of recovery, volume is generally low, indicating a lack of strong buying pressure. The speaker recommends focusing on buying the index rather than individual stocks, and emphasizes the importance of having a clear set of rules for buying and selling to manage risk and maximize profits. He also highlights the value of continuous learning and surrounding oneself with experienced investors and traders.