HOW TO READ THE CHARTS
There are four primary components to each chart:
- The price chart is contained within the shaded area which represents 2-standard deviations above and below the short-term moving average.
- The Over Bought/Over Sold indicator is in orange at the top.
- The Support/Resistance line (green) is the longer-term moving average which also acts as a trailing stop in many cases.
- The Buy / Sell is triggered when the green line is above the red line (Buy) or vice-versa (Sell).
AMZN – Amazon.com
- If the market is going to move higher into year-end, the AMZN should lead the way particularly as we head into holiday shopping season.
- The trade setup is pretty clean, with AMZN’s sell signal pretty deeply oversold.
- Buy at current levels.
- Stop is $1750
- This is a “pair trade” in the semi-conductor space.
- Buy a position on a breakout of the consolidation at $295.
- The short side of the pair is AMD discussed below.
- Stop is $280
AVY – Avery Dennison Corp.
- AVY has been in a pretty tight consolidation for a while. If AVY can breakout above $117.50 we will likely see a move higher.
- AVY is close to a “sell signal” so don’t buy until there is confirmation of a move higher.
- Stop-loss is $112.50
CGC – Canopy Growth Corp.
- I have been getting lot’s of request for a “cannabis” play.
- These stocks are all terrible fundamentally and most of them will likely go away through merger, acquisition, bankruptcy, etc.
- However, from a trading perspective, CGC is very oversold and sitting on support.
- From a trading perspective only, you can buy at current levels with a stop at the recent lows.
- Short-term upside is $32.50 but a move above that level will likely get buyers excited.
- Stop-loss is set at $23.
CHRW – C.H. Robison Worldwide
- Trucking data has been horrendous for so long now that it is likely to improve simply on year-over-year comparisons.
- Buy a position in CHRW at current levels.
- Target for trade is $96
- Stop loss is set at $82.
AMD – Advanced Micro Devices
- AMD is the short-side of the “pair trade” with AVGO above.
- AMD has triggered a “sell signal” and is close to breaking down out of its consolidation.
- Trading parameters are very tight.
- Sell short the position on break of $30.
- Target for trade is $20-22
- Stop-loss is at $32
DEO – Diego, Plc
- DEO just broke its long-term uptrend and is on a sell-signal currently.
- Sell short 1/2 position in DEO on any rally that fails to move above $165.
- Sell short second 1/2 position on a break below $162.50
- Target for trade is $145
- Stop-loss is $167.50
FB – Facebook, Inc.
- FB has been consolidating is a tightening pattern over the last couple of months.
- With a “sell signal” now triggered at a fairly high level, downside risk is fairly decent.
- Sell short FB on a break below $185
- Target for trade is $160
- Stop-loss is set to $190
GE – General Electric Co.
- GE has rallied back to resistance and its “buy signal” is VERY extended and has recently reversed to a “sell signal.”
- Short GE at current levels.
- Stop loss is $10
- Target for trade is $7
HLT – Hilton Worldwide Holdings.
- HLT has also recently registered a “sell signal” and is trading at fairly overbought levels.
- Sell Short HLT on a break below $90
- Target for trade is $70
- Stop-loss after shorting the position is set at $92.50
Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube