Weekly Update: Market Resistance and Three Stocks to Watch
Good evening, and welcome to this week’s edition of Stealth Trades!
Editor’s Note: Ross is out of town today on a 40th birthday trip to Kentucky. Our top analyst, Jean Fede, is writing this week’s update.
The market seems to have found previous resistance that has been tested multiple times in the past year. This area acted as a support level when the sell-off started back in March of last year and it has now run back into it multiple times.
Every time we get nearby the market seems to stall out and begin to chop sideways, not really making any significant moves.
Honestly, it seems as if the market is preparing to have an aggressive break and finally hold above it.
As you can see from the chart above the 200-day moving average is now beginning to curl upwards and the deeper retracements we have created have all been higher than the previous, i.e. higher lows.
The current prediction would be a break above this level, and we can possibly see a run into the 430 area again as we did in August of last year.
At the time of writing this, we are only a few percentage points below the level, and we are right above our 50-day moving average.
Here are a few stocks I am watching right now:
Brainstorm Cell Therapeutics, Inc. (BCLI)
BCLI is a biotechnology company that develops and commercializes autologous cellular therapies for the treatment of multiple neurodegenerative diseases.
The company has had its leg cut from under them from the highs made in October 3 years ago, all the way down to where we are now.
Shares were trading at roughly $18 and are now trading at roughly $3.
But the stock is showing signs of a possible new breakout to the upside.
The 10-day and 21-day moving averages are both above the 200-day moving average. The 50-day moving average is currently being angled upwards.
I would personally want to see a break above the $3.30’s area to look for any sort of entries.
Brookdale Senior Living Inc. (BKD)
BKD’s main business model is the operation of senior living communities.
The company has recently had a spike in price, increasing by over 90% in only 31 days.
Last month’s earnings report was a beat on both ends and we did not really see a continuation of that move. However, prices have shot up before earnings this time around, and now we are basing right above the 200-day moving average.
Since this recent run up, the candlesticks have been small and tightening in this wedge formation.
If we take a look back at the current price, then we can see that the decline in price came all the way back down to those lows of COVID before making this significant move higher.
As of Friday morning, I believe that once we break the $4.30 area that we can possibly look to take an entry there with a stop loss just beneath the 10 EMA roughly at $4.10.
Cardlytics, Inc. (CDLX)
Cardlytics Inc. had a spike just a few weeks ago that was over 25x the average volume. That rally led us to a resistance area that previously acted as a support level a few months ago.
Up 190% from the lows last month, we could be in for another ride on this one. We can see here that price was previously trending below all 3 moving averages and each retracement into them usually led to lower prices.
This is a sign of buyers’ intent because they have previously bought the price above the moving averages and we saw an aggressive rally higher. Now it has occurred again, if we can see another rally above and break of this level then we can be in for another ride.
CDLX is also respecting our 10-day and 21-day moving averages so far, as it has retraced and it is currently still above them.
I think a break above $7.40’s would be an ideal entry point.
Best wishes for your trading,
