Momentum Monday – More Reasons to be Bullish than Bearish

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After an explosive rally in early June, all major U.S. stock market indexes are in consolidation mode. Most software momentum stocks are also either pulling back on light volume or going sideways. This is normal and typically bullish market development.

The IPO market continues to be on fire. Last week, we saw hot action in FVRR, CRWD, even CHUY.

Many biotech stocks are also breaking out or setting up for a potential breakout – VCYT, VYGR, ARRY.

Disney is on the radar of many traders and investors. It has managed to hold its big gap from April and it is now back near its all-time highs.

In the last third of the show, we discussed some of the differences between swing trading and long-term holding and how to pick potential big winners that can be held for years.

P.S. Check out my last two trading books. Both are super practical, packed with actionable information that can be put to use right away:

Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, how to trade them, how to make money with them.

Momentum Monday – Impressive Bounce. What’s Next?

The charts on Momentum Monday are powered by MarketSmith

The last standing industry group – enterprise software, was hit hard last Monday Monday, which basically marked the lows. Just when everyone was turning bearish and one of the best money managers of our times – Stanley Druckenmiller appeared on CNBC to tell us that he sold all his stocks when Trump tweeted about new tariffs in early May, we saw a face-ripping rally.

Most momentum software stocks had a 20-30% intra-week price range. Look at the price action in COUP, MDB, OKTA, TWLO, AYX, SHOP, TTD,  etc. Whatever new or old short sellers were hanging out in those names, were squeezed out of their positions.

After epic rallies last week, most software stocks are technically extended. Unless you are a skilled intraday trader, it makes no sense to chase them here from a risk-to-reward point of view. The biotech sector is looking a lot more interesting with setups in TNDM, VCYT, ASND, and others.

P.S. Check out my last two trading books. Both are super practical, packed with actionable information that can be put to use right away:

Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, hot to trade them, hot to make money with them.

Momentum Monday – Software Stocks Are Back In Play

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Bull markets correct through sector rotations; many and frequent rotations that can spin your head off if you try to keep up with them on a weekly basis. A couple of weeks ago, we saw capital leaving tech and healthcare and moving into the so-called “old-economy” sectors. Last week, we saw a rotation from hardware to software.

After a major rally, semiconductors are pulling back. Intel’s revenue projections are declining. Xilinx’s growth is slowing down. The semiconductor index (SMH) is up 33% year-to-date. A pullback is absolutely normal. All trends need pullbacks; otherwise, they cannot last long.

In the meantime, software stocks are finally waking up and starting to break out. Many of them are scheduled to report earnings in the next few weeks. Expectations are certainly quite elevated. Maybe, this is why we are not seeing a very enthusiastic market reaction to solid reports – AMZN, NFLX, MSFT, FB, etc.

Check out my two best trading books:

Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, hot to trade them, hot to make money with them.

Momentum Monday – Sector Rotations Continue

All charts on Momentum Monday are powered by MarketSmith

While biotech, healthcare, and some software stocks are under pressure, the so-called old-economy sectors – finance, manufacturing, and transportation, are shining. Money never sleeps, indeed. It just rotates from one sector to another.

The Nasdaq 100 is at all-time highs led by the enterprise software giant Microsoft. Google and Amazon are not too far behind – both of them are setting up for potential breakout and have earnings due soon. Apple is back to a trillion-dollar valuation.

Check out my two best trading books:

Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, hot to trade them, hot to make money with them.

Momentum Monday – Earnings Season and Game of Thrones Are Back

All charts on Momentum Monday are powered by MarketSmith

The current bull market continues to correct through sector rotation. While money is flowing into financials, semiconductors, energy, and software, healthcare and biotech have been under pressure as of late.

Will Disney+ disrupt Netflix or the new online streaming service is not a big positive for Disney and neutral for Netflix. We will know a lot more about how the market perceives it after Netflix’s earnings on Tuesday.

We also cover athleisure stocks – NKE and LULU are consolidating near all-time highs.