Trend Following Trade Ideas For December 2018 (Pt 1):

Welcome to December! With the new year right around the corner, I’m hoping the market can benefit from some holiday cheer in the weeks to come. And after a positive end to November, there are finally more stocks starting to set up under the surface.


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Now, let’s quickly recap the trading action of the past week, and then take a closer look at some individual stock charts that look like they might have breakout potential.

December 2018 Stock Market Outlook:

Heading into December 2018, the major stock indexes are barely green for the year. If it weren’t for the strong performance by bulls last week – emboldened by the words of Fed Chairman Powell – the technical picture would really be looking precarious. But…

As it stands, the S&P-500 weekly chart is actually looking the best it has in a while. Now sure, it’s still below all-time highs. But at least the long-term uptrend is still hanging on:

Free Trend Following Trade Ideas For December 2018 (Part 1) SPX weekly

As you can see, buyers were actually able to recoup all the losses we saw last week. And zooming into the daily timeframe, you can see price has bounced all the way back to it’s 200-day moving average.

Free Trend Following Trade Ideas For December 2018 (Part 1) SPX daily

So looking ahead to December, I think the question is whether or not this is just a big oversold bounce that will lead to a higher high. Or, is this the end of this correction and the start of a year-end rally?


The one obvious unknown is how the market reacts to news out of the G-20 meeting this week. It’s always tough when there are binary events like this. But if buyers can continue to bid up prices Monday morning, I suspect we might be out of the woods.

Trend Following Trade Ideas For December 2018 (Part 1):

With the market putting in a strong performance last week, and the long-term uptrend still looking like it’s holding, I’m a little more optimistic than I have been the last few months. So assuming Monday’s reaction to any G-20 news is positive, I think the ideas below could continue running.

So the first chart I want to show you this afternoon is VMWare (VMW). This isn’t one of the most popular tech stocks these days, but the chart sure has my attention.

Free Trend Following Trade Ideas For December 2018 (Part 1) VMW

Not only is the stock at 52-week highs, it also put in a strong weekly close on Friday. So if the market can keep following through this week, I’m optimistic VWM can get in on the fun now that it’s in blue sky territory.

Another stock chart that’s got my attention this week is Tribune Media Co (TRCO). This stock is back near 52-week highs and it’s shaken off the October correction better than most:

Free Trend Following Trade Ideas For December 2018 (Part 1) TRCO

In times of market weakness, I tend to focus on the strongest names with the hope they’ll outperform once the market gets moving again. TRCO looks like it might be a candidate, especially since the stock isn’t too extended.

Next up, I want to show you Medical Properties Trust (MPW), which has really been an out-performer. I like the way it’s been able to breakout again and after the tight consolidation the last two weeks

Free Trend Following Trade Ideas For December 2018 (Part 1) MPW

The other possible tailwind here is the overall strength in the REIT and healthcare sectors. Being at the intersection of the two, this one might just keep on trending.

Okay, I also want to share an idea of a new stock I picked up this week, which also happened to be in the healthcare space. My hope here is more top-down strength can keep the good times rolling.

So here’s how I’m playing Healthcare Services Group (Inc) HCSG:

Free Trend Following Trade Ideas For December 2018 (Part 1) HCSG

Admittedly, I do prefer stocks that don’t have any overhead supply. But in the current market sometimes you have to take what’s available and all things considered I still like the way this moves. Now…

The last chart I want to show you is an ETF for Central and Eastern Europe (CEE). It hasn’t quite broken out yet, but I think it’s worth keeping on your watch list:

Over the last few weeks, emerging markets have started to stabilize a little bit after a relentless downtrend all year. And with China-trade headline risk in the spotlight, I thought this group of stocks was starting to look appealing. So if this can get trending in the week ahead I’ll likely to get some exposure.

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.

And plus…

I hope this helps give you more context on how I’m seeing the current market, and where I’m allocating capital.

Speaking of…

While I’ve obviously shown you some of my favourite picks for the week ahead, I can also teach you how to fish for your own trading ideas!

Just keep reading.

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