Weekly Update: Where the Rubber Meets the Road
Good evening, and welcome to this week’s edition of Stealth Trades!
This is where the rubber meets the road.
The indexes are trading at a big area that will dictate whether the bull market marches higher, or we have more work to do below.
The Nasdaq is trading a key level of support:
This has been a zone of support or resistance since June. It is also the level where the market finally broke through its downtrend and reclaimed the 200-day moving average.
The S&P 500 is also at a crossroad…
The 50 and 200-day moving averages will provide a vital test of support. We need to see them hold and see buyers step in here.
Until I see evidence the market is weakening, I remain bullish. That means I am buying stocks, not shorting them.
I mentioned 3 names I was watching in the last weekly update. All of those setups are still intact.
Here are a few more on my radar:
Alpha Metallurgical Resources (AMR)
Above is a weekly chart of AMR stock. It has been forming a base for almost a year, and the larger time-frame chart makes that easier to see.
Notice the series of shallowing retracements from left to right as the stock continuously found support at its 200-day moving average (white line).
Resistance is clearly defined by the dashed line on the chart at $175 per share.
If AMR can stay above that level for a week, this could be the start of a longer-term trend higher for AMR.
Protagonist Therapeutics (PTGX)
PTGX is a biotech stock in the middle of a big rally.
The price has more than doubled since December and showing no signs of slowing down.
What caught my eye on this chart was the volume.
Look at the number of big up days. This is a clear sign of institutional accumulation.
If you want to make money in stocks, get on the same side as the funds and institutions. And they are clearly buyers in PTGX.
Chase Corporation (CCF)
First things first – this is not Chase bank.
Chase Corp is a specialty chemical company that specializes in protective coatings.
The chart looks similar to the setup I’m seeing in AMR – a textbook base made up of a series of shallowing retracements from left to right.
There are also big patches of heavy buying volume which support a pending breakout to the upside.
$100 per share (often called a “Centennial level) is likely to be significant. But if CCF can break through it, I expect to see a quick move up to the $120 area.
Best wishes for your trading,
Ross Givens
Editor, Stealth Trades