A happy new year to you! Welcome to January 2022 and I hope this year you and I will be able to make at least 100% return in our portfolio. Is 100% even possible?
Yes it is. If you are a self directed trader who takes your own trades and only trade when the setup is there, then you can certainly achieve that.
This year I hope to introduce a stock market course title "7 Best Times To Buy Stocks". Actually when I listed the times that stocks tend to move up there are at least 13. So I might change that title to 13 Best Times To Buy Stocks.
Hopefully I can finish it by the first quarter of this year and give you some insight into how to make money in the stock market.
Oh ya...by the way, I have a free stock market course for you. Go to the homepage and you will see the entire course by chapter. That is my free gift to you.
Gooday and welcome to this week's commentary. I do not have much time recently since have lots of other things going on. But at least I want to write something here in a weekly basis. So do expect at least a weekly commentary. Anyway we do not need to look at the markets that much to make money.
Working out of a daily and weekly chart can rake in millions for a good and patient trader.
The S&P 500 is finding support at the rising 50 MA. This is usually a good place to buy. The 50 MA is a very good place to place longs as this is a good support area where the market may rise back up.
One thing to note is that the S&P 500 also found support at the rising uptrend line. Besides that, we see a daily bottoming tail. All this points to a good place and time to load on your favorite S&P 500 stocks.
Let us take the daily bottoming tail as a reference. I think that as long as S&P 500 stays above the low of the bottoming tail then we will see the current lows and see the S&P 500 continue to make new highs.
The Nasdaq 100 was much weaker and broke below a previous low support. However, it quickly bounce back up to form a daily bottoming tail and this is probably a reversal area. Just like the S&P 500, as long as Nasdaq stays above the low of the bottoming tail, then we will likely see the bottom.
These 2 days are a good area to load up on tech stocks as well since the Nasdaq is quite oversold. It is when things have been oversold we want to think of buying not when it is way up there.
The Dow is making a very nice bullish reversal pattern. It is at the 20 MA and 50 MA and it formed 2 bottoming tails.
The presence of 2 bottoming tails is very powerful and as long as Dow stays above the lows of these 2 bottoming tails, then we will see Dow continue to rise and make new highs.
This is a good time for a short term buy in stocks.
I remember that there is a saying that goes like this...if the first day of the trading year is positive, then we can expect the year to be a good year. Ok...I am not very sure if that is true. I must have read it somewhere.
But the psychology is there I suppose.
Yesterday, Apple did very well. The same thing goes for Tesla.
The market was weak in the first hours of trading but eventually it went back up.
I think that perhaps fund managers were loading on important stocks towards the afternoon and this in turn might be good for the stock market in the months to come.
Anyway, the chart above is the 2 hour chart of the SPX. It is trying to break out of a trading range. There is also a bullish cross that is happening. When the index breaks above a consolidation, this can mean that it is bullish.
And as long as SPX stays above the trading range, we can expect higher prices in the next few days.
The chart above is the chart of the Dow Jones in the daily timeframe.
We can say that the index broke out of a triangle type of pattern. This is also good as when it breaks out of a triangle, this means that there is more bullishness than bearishness.
I have highlighted two areas of support.
The first one is the green area which is a previous high. This will act as the first support.
The second more important support is the tip of the triangle. When an index breaks out of a triangle, the tip can usually be a good hint of whether more bullishness will occur. Usually in a bullish environment, you will not see the index drop near to the tip of the triangle.
Even if it does so, a good bullish environment will not experience a drop below the tip of the triangle.
So for the time being, I do not see any weakness and there is more bullishness than bearishness. So do continue to maintain a bullish bias in the US stock market.
I would like to start this week of by showing you what to expect in the stock market. And for that let us take a look at the S&P 500's daily chart. By the end of this analysis today, you will agree with me that the stock market is more likely than not to move higher.
I get ahead of myself. Let us let the charts speak for itself.
If you take a good look at the daily chart of the S&P 500 you will notice that it has broken out of a daily ascending triangle. The ascending triangle is a bullish continuation pattern with a target of the height of the pattern projected upwards.
When a stock or index is in an uptrend and an ascending triangle appears, then this is quite bullish. This tells us that the stock market wants to go up. It is likely to continue to go up because of the presence of a bullish continuation pattern.
So if you are a trader and have to make a trade, your trade will yield you more returns if you place your trade to the long side.
The other thing is, I believe that the top of the ascending triangle will make a strong new support. Remember the TA rules...when resistance is overcome it becomes new support.
There was quite a lot of congestion around that area but the SPX managed to break above it. So it is likely that this area will now act a good support. I have colored the area in green.
As long as SPX stays above this area, then it is likely to continue to move higher.
I like using the moving averages to help me gauge the trend.
If you look at the MAs in the chart above, you will notice that all three moving averages which are the 20 MA, 50 MA and 200 MA are all sloping upwards. SPX is above all 3 and this tells us to have a bullish bias in the short term, mid term and longer term.
Look for bullish trades my friend. But at the same time be patient to wait for your setup.
If you want to be successful this year, have one trading strategy...master it...trade that strategy only and when December 31st come, you will thank me because your account will have increased. Perhaps a 100% return.
May 30, 22 07:20 AM
What is the market doing and what is it likely to do?
Apr 27, 22 09:01 AM
As we enter April, will we continue to move higher or will there be a correction coming?
Apr 13, 22 11:46 PM
Apple is one of those stocks that we should look at almost every day. The reasons is because it is a component of the Dow Jones, the S&P 500 and the Nasdaq.
Apr 12, 22 09:38 AM
Here are a list of stocks that are at their 50 MA and 200 MA. The 50 day moving average and 200 day moving average can be a support area where stocks bounce off
Apr 12, 22 09:34 AM
Here are a list of stocks that have broke out or about to break out. Breakout stocks can often give us a good reward to risk ratio.