Free Trend Following Trade Ideas For January 2019 (Part 4):

What can I say? January has been a great year for stock market bulls so far! And with another strong close this past week, it looks like the upside momentum might continue. So I’m very eager to dig into it with you today.


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Alright, before getting into specific stock charts I want to quickly take a look at the big picture of markets to provide a little context. And then we’ll look at some individual breakouts that are looking promising in the week ahead.

Now let’s dive in!

January 2019 Stock Market Recap (Part 4):

To start these weekly market updates, I always like to take a step back. By spending a little time reviewing the indexes and market leading charts, I can usually get valuable context, which helps frame my expectations for trading generally.

Because in my experience, the top-down trading environment can have a big impact on how stocks trade and whether breakouts follow through. It can also help inform position sizing strategies and risk management.

Now most of the time I like to look at weekly charts for the best signal-to-noise perspective. But today I want to zoom in on a few key daily stock and ETF charts first. Because it’s in the short-term that we’ve seen the most interesting trading action recently.

So first up, let’s take a look at the SPY daily chart. Despite a sharp and strong bounce year-to-date, bulls are still pressing the envelope:

Free Trend Following Trade Ideas For January 2019 Part 4 SPY

You might remember from last week’s trade ideas, I said a tight consolidation range this week would be positive for bulls. And as you can see, that’s exactly what we got!

So in my opinion…

This kind of consolidation is a promising next step. After all, prices were a little stretched. But rather than reverse and give up the gains, we’ve been able to see prices work off short-term overbought conditions by going sideways, through time.

And under the surface, earnings reactions have tended to be good. We’ve also seen some bullish signs of sector rotation, which is a nice change to the indiscriminate panic selling that marked the end of 2018.

Speaking of earnings, we might get some real insights from the market reactions to big tech names like Apple and Facebook next week. And based on the price charts below, I think there’s a case to be made a lot of bad news is already priced in.

So first, I can’t help but notice the FB downtrend looks like it might be turning around (or at least flattening out)…

To be sure, price is still below long-term moving averages which is always a red flag for me. But it feels like the stock has held up pretty well recently despite an onslaught of negative headlines. So has all this bad news been priced in?

Along the same lines, AAPL is firming up quite well ahead of earnings too. With a profit warning and reduced guidance already in the public domain, is the iPhone maker set for an upside surprise?

Free Trend Following Trade Ideas For January 2019 (Part 4) AAPL

In any case, I think it bears watching mega-cap tech names this week and next as their earnings reports could have a material impact on the indexes. At the end of the day, there’s a good chance they become the tail that wags the dog!

Now changing gears for a minute…

I’d be remiss not to point out the potential trend change taking place in emerging markets either. This can be clearly seen on the EEM ETF chart below:

Free Trend Following Trade Ideas For January 2019 (Part 4) EEM

While it’s been a tough year for EEM bulls, I think this recent price action is pretty encouraging. There’s a chance prices could still fall back into the recent consolidation range. But at the moment, this higher high looks encouraging and could be a boon for stocks and equity risk appetite globally.

So all that to say, until we see any downside follow through from leading stocks and indexes generally, I’m inclined to keep placing bets on the long side. So let me show you a few of my favourite charts…

Free Trend Following Trade Ideas (January 2019 – Part 4):

Even though the main stock market indexes are still below their long-term moving averages (indicating a lack of uptrend), there are a fair amount of individual stocks setting up pretty well. And although I’m keeping my positions on the small side, I’m still willing to place some bets on these leading names.

First, I want to show you the chart of Docusign (DOCU) a relatively younger chart that’s starting to perk up again after a rough start post-IPO. In my opinion, the case for a medium-term bottom here is pretty compelling.

Free Trend Following Trade Ideas For January 2019 (Part 4) DOCU

One of the things I like about this idea is not only has the chart firmed up but, the underlying business has continued to grow it’s top line since coming public. My hope is that this kind of operational performance can help propel the share price to new highs.

Next up and along a similar line, I want to show you the chart of cloud-accounting software provider Coupa (COUP). This is another newer chart, but it’s also acting well…

Free Trend Following Trade Ideas For January 2019 (Part 4) COUP

With the new weekly closing high, and shares of COUP in blue-sky territory, I’m hoping it can keep trending. I haven’t picked up shares of this one yet, but it’s on my radar in the week ahead.

Up next…

I want to pivot to some lower-priced small cap ideas, because I know some of you like to play in that space. The fundamentals aren’t quite as robust here, so always be sure to have a plan for managing risk and knowing when to sell.

So one small-cap idea that has my eye heading into Monday is BioCryst Pharmaceuticals (BCRX). It’s a little bumpy, but continues to grind higher:

Free Trend Following Trade Ideas For January 2019 (Part 4) BCRX

Due to the volatility, I’d be inclined to keep any trades here smaller sized than usual. But on the other hand, the good thing about volatility is it cuts to the upside too!

Now to finish us off today, I want to turn my attention to gold stocks. Because despite the surge in the indexes this week (or maybe because of USD weakness), the yellow metal has been very resilient.

And one of my preferred charts in the precious metal complex is the SPRD Gold Miner Mini Trust (GLDM).

Free Trend Following Trade Ideas For January 2019 Part 4 GLDM

With this ETF at new all-time highs, I’m hoping it can keep squeezing higher. If gold’s momentum can keep running in the months ahead, this chart may be able to keep trending into blue sky territory.

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.

And plus…

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.

Speaking of…

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.

Learn How to Scan For Breakout Stock Picks:

If you want to learn more about how I find these kind of stock picks, I encourage you to check out my Breakout Stock Blueprint. What’s that, you ask?

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This Blueprint shares the EXACT step-by-step process I use to find and trade stock picks each week (just like the ones above). So…

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