Moving back to risk off: Earnings & S-tier set ups
Breakouts have been working but as we move into the bulk of US earnings, it might be time to take the foot off the pedal.
The ASX 200 had a pretty weak finish to the week. Resources have been selling off since Thursday and Financials pulled back on Friday. April followed seasonality trends to a tee, so does this point us towards a weak May and June?
It’s going to be a banger this week with 42% of the S&P 500’s market cap set to report first quarter earnings. And the SPX has been trading below a key resistance area. Brace yourself for a breakout … in either direction.
Week in Review
Sectors in Review
Weekly Watchlists
My charting process involves manually going through 200-500 charts a few times a week. My filter is quiet simple: The stock must trade above its 200-day moving average and trade above 1 cent.
The charts are then categorised into three categories (we’ll call them 1, 2 and 3).
1: Top tier set ups trying to break out, high-profile stuff to watch over the next few days (sometimes 1s that break out will stay here for a week or two)
2: Set ups that need a little bit more time or not quiet there yet
3: Stuff that’s already broken out (e.g. might’ve been 1/2 in previous weeks) or interesting charts that aren’t my style
The charts below typically come from (1).
Here’s the link to all of this weeks charts (txt format for TradingView)
Stocks of Interest
The current low volatility environment has allowed a lot of set ups to work property. Our watchlists have been pretty bang on in the past 1-2 weeks with notable breakouts such as De Grey (DEG), Tourism Holdings (THL), XRF Scientific (XRF), Lindian (LIN) and Duratec (DUR).
The focus should continue to be on S-tier set ups. Anything less than that and we may fall victim to choppy charts that still need more time or provide unfavourable risk/reward.
That said, a lot of charts have moved out in the past few weeks. So S-tier set ups are running a little dry. US benchmarks like the Nasdaq and S&P 500 are trading at key inflection points, so perhaps its time to take the backseat and see how things play out in the next couple of sessions.
Carsales (CAR): 5-month base
MMA Offshore: Strong trender that’s setting up again, might need more RHS.
Audinate (AD8): Frustrating chart. Basing after a breakout in early March.
Duratec (DUR): Strong trender that’s breaking out. A little extended now.