Free Trend Following Trade Ideas For April 2019 (Part 3):
Welcome to earnings season! While bulls managed to put together another strong week in the market, all eyes are looking ahead to the quarterly numbers that started to roll in Friday.
So as usual, let’s recap some of the bigger picture trends in price action, and then drill down into individual charts and trade ideas. Because the good news is, there are plenty of individual charts that are looking good right now.
So let’s get started! First then, I want to recap some of the broader market conditions because as the second quarter of 2019 starts to unfold, it looks like bulls remain in the driver’s seat.
Let me show you why.
April 2019 Stock Market Overview (Pt 2):
For another week, SPY continued to grind higher. And seemingly like magic, most of the major indexes are back near all-time highs! It’s hard to believe, but the complete fourth-quarter unwind of 2018 has more or less been fully recovered! Take a look:
This longer-term weekly chart really helps illustrate just how intense the fall and subsequent rebound have been over the last 6 months. And now, the question becomes whether this month’s rally can continue throughout the second quarter of 2019.
The good news is, with earnings season now upon us we should get some resolution pretty soon. Plus, I think it’s reasonable to expect a lot of good news just got priced in with this impressive year-to-date bounce. So it’ll be interesting to see if these higher expectations can be met.
Now to be sure, it’ll take a couple weeks to find out the answer for sure. But if the inaugural big bank reports were any indication, the momentum could be set to continue. In fact…
Financials have been one of the weaker market sectors lately. But with strong numbers out of JPM the sector has started to catch some buy volume. And the higher high on the weekly chart of the sector ETF, XLF, is a good first step…
As you may have noticed, financial stocks have been conspicuously lagging the rest of the market this year. So any continued upside here could be a big benefit for bulls overall and another piece of the puzzle falling into place.
Digging deeper under the hood…
Pretty much all market sectors were green for the week, with healthcare being the notable exception. But aside from healthcare and a couple company-specific issues (like bad news at WFC and NFLX facing new competition in DIS) it was another good show by bulls.
This 1-week FinViz heatmap does a good job showing you what I mean.
Overall, that’s a lot of green! And even in the case of healthcare, you can see on the XLV weekly chart below that despite the reversal this week, the chart hasn’t sustained irreparable technical damage yet. And it’s still pretty close to the highs:
So while I’ll be on guard if we see more downside follow through in XLV next week (especially if it spreads to the rest of the market), I think the balance of evidence still weighs bullish. Of course, earnings season could change that and how you trade earnings is a personal matter that you’ll need to decide for yourself.
But with everything from tech and consumer staple stocks to emerging markets and European indexes moving higher, it’s hard for me not to be invested. Again, that could change with this latest crop of incoming quarterly reports.
Until it does though, I’m still on the lookout for strong charts. And the good news is, there are still plenty of them out there! So let me show you a few of my favourites:
Free Trend Following Trade Ideas For April 2019 (Part 3):
With the indexes continuing to pinch higher, there are a fair amount charts near all-time highs. As usual in these cases, the challenge is finding those that look like the might be able to put in lasting moves higher. So first up…
Altice USA (ATUS) is a current holding of mine that I can’t help but mention again. In case you missed it, I first shared this idea back in February when I originally picked up shares. But now that the stock is breaking out from another consolidation, I think it’s worth another look:
Never mind ATUS is already up over 10% since I first bought it. Because the chart still looks good to me and I think a fresh entry signal is always worth paying attention to. After all, the stock is still well below its post-IPO highs, which could serve as a price target.
On the other hand, I also like stocks at new all–time highs. And after a lengthy sideways period, Arista Networks (ANET) is finally starting to look interesting again.
Not only has the stock has just recently hit a new weekly closing high but, considering how well it’s been able to trend in the past, I’m willing to take this signal seriously! But again, with all these ideas please do double-check the earnings dates.
Along the same lines as ANET, I like the look of Ametek (AME) too. I appreciate it’s a little bit extended in the short-term. But the possibility it can keep moving in a meaningful way (as it has in the past) keeps me intrigued:
And I think as long as you carefully manage risk with stop losses and position sizing, it can be worth taking a swing. Because many charts can keep going up much longer than you might think rational.
Finally, Okta Inc (OKTA) is a recent trend following favourite that’s back at new highs. With the strong candle this week I think it bears watching:
This cloud enterprise stock has had no shortage of momentum. And since it reported earnings March 7th there’s still a bit of runway before the next report. So with any luck we could see more upside here too, as software stocks continue their sector strength.
Now before we finish…
I also want to share my existing trend-following trading positions for US-listed stocks with you. So here they are in a FinViz watch list! Take a look if you’re still itching for more potential trade ideas.
They might be of interest because everything is laid out in charts so you can easily see what’s what.
Because actually, there have also been a lot of great trends this week so I’m quite bullish on many of my existing holdings.
I hope seeing my current stock portfolio helps give you more context on how I’m seeing the current market, AND, where I’m placing my bets.
While I’ve obviously shown you some of my favourite picks for the week ahead, I can also help teach you how to fish for your own trading ideas!
Just keep reading.
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