Free Trend Following Trade Ideas For November 2018 (Part 1):
Welcome to November! Because after all that volatility we endured, it’s nice to finally turn the page and start fresh. And so far, this month is off to a WAY better start! So I’m excited to review the price action so far, and share some stock charts that are looking good to me.
Alright, let’s quickly recap what’s happened with the major stock market indexes, and then we can get into some specific stock charts. Sound good? Great!
November Stock Market Outlook and Analysis:
After the volatile October we just endured, it’s nice to turn the calendar to a fresh page. And so far, November is off to a much better start. Now I don’t think we’re completely out of the woods yet.
And I’ve been documenting my defensive posture in the last few weekend updates. Overall, this approach has worked out well. But I’ve got to say…
The recent rally is a nice change of pace, and a good start for bulls. It’s encouraging to see buyers stepping up and defending the long-term uptrend after a dramatic start to this past trading week.
The SPY weekly chart does a good job showing you what I mean:
As you can see, we’re still well below prior highs. But at least buyers came in and bid prices off the lows after stocks started the week on the back foot. So from here, I’m watching if bulls can keep building on this first step.
Now for a bit more context, let’s zoom into the daily chart time-frame for SPY:
The reason I like this view is because you can start to see some of the building blocks of trend, in relation to key moving averages. Notably, SPY is still below a flat 200-day MA. And despite the brief move higher, sellers pushed the close below this line in the sand.
But it’s not just the S&P-500! Because small caps and tech stocks also closed the week below their respective 200-day MAs, which casts some doubt on the long-term trend here.
So while I’ll be watching for higher highs and higher lows to take shape, I won’t be surprised by more downside (or at least a bit of a sideways trading range).
The good news is…
After 4-5 weeks of intense volatility, I’m starting to see more individual stock charts setup under the surface. Now admittedly, it’s hard to push the envelope with breakout trades when the top-down market environment is crashing.
But this is a good first step. Let me show you what I mean…
November 2018 Breakout Trend Following Trade Ideas:
With the month of November off to a better start, I’m more interested in upping my long exposure than I was throughout October. Because rather than try to pick a bottom, my preference is to wait for stocks to stabilize a little before putting my capital at risk.
So here are a few stock charts that have resumed their uptrend and might be worth a closer look.
The chart of Keurig Doctor Pepper (KDP) is a real stand-out right now. There isn’t a ton of price history here, but since these are established brands I’m a little more comfortable hopping on a younger trend.
I appreciate this ticker has already moved quite a bit. But with the stock in blue sky territory on the back of fundamental news, I’m cautiously optimistic this uptrend can continue.
Plus, momentum like this can last longer than you think…
For example, another ticker I’m quite interested in right now is Starbucks (SBUX). And even though the stock popped quite a bit this week, the longer-term view shows why I’m still interested and don’t think it’s too late.
Considering how long this company has been stuck in a sideways trading range, I think it’s possible that if this stock does get going, it could keep trending for quarters or years at a time.
Now on the other hand, I appreciate you might also like to wait for breakouts and act on them as they happen. So in that case…
I encourage you to keep First BancCorp (FBP) on your radar. I already own a few shares, but like the way it’s held up in the recent market turbulence, and am now watching for the next leg higher.
In my experience, some of the best trading opportunities coming out of a correction are those stock that held up well. If and when momentum comes back into the market, I’m hoping FBP can catch a bid.
I also like the way Arbor Realty Trust (ABR) has been acting. And if this one is able to hit new highs next week I’d be interested in jumping on the trend.
And the great thing about REITs is that in addition to potential share price appreciation, you can usually pick up a healthy yield too. So if you’re looking for an income-oriented idea, this might be one to keep in mind. My only concern is this group is generally interest-rate sensitive so I’d want to keep it on a tight leash.
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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