Starting the week ahead of the pack? Check out Momentum
Mondays where the leading breakout stocks and major events of the
week are covered, preparing investors for profitable trading.
Today, a review of the broad stock market indexes over the past
weeks, along with a glance at the economic calendar and upcoming
earnings releases, will address any market-moving data.
Additionally, four compelling technical trade setups in top Zacks
Rank stocks will be shared.
Overview of Economic and Earnings Calendar
This week holds critical economic data releases and quarterly
earnings meetings, promising interesting market action. Fed
speakers scheduled throughout the week have the potential to sway
the market, especially amid shifting expectations about interest
rate policy. Inflation data, including CPI, Core CPI, initial
jobless claims, and PPI, Core PPI, will be key data points for
policymakers and investors. Additionally, numerous companies,
including Artista Networks, Coca-Cola,
Shopify, Occidental Petroleum,
and Applied Materials, among others, are lined up
for earnings reports.
Equities Rally and Semiconductors Lead
Equity indexes continue to surge, fueled by remarkable moves in
Semiconductor stocks. Nvidia, Super Micro
Computer, and ARM Holdings have made
exceptional gains within the first six weeks of the year. It seems
the market is still in the initial stages of factoring in the
Artificial Intelligence boom. The Nasdaq 100 QQQ broke higher from a bull flag last week, indicating potential
for further upward movement. This channel serves as a measure of
sentiment.
Image Source: TradingView
Technical Setups
This week’s focus is on earnings gaps and bull flags. Each of the
stocks shared here have seen strong gaps higher following earnings,
followed by sideways action. These setups present a compelling
opportunity for high probability trading, further enhanced by the
fact that each stock holds a Zacks Rank #1 (Strong
Buy). The selection includes two defensive stocks and two
aggressive stocks, with the defensive names expected to outperform
if the broad market weakens, and the aggressive names poised to
shine in case of a continued market rally.
The chart for Clorox CLX
reveals potential for a breakout if the stock trades above the
$154.20 level, while invalidation of the setup may occur if it
fails to hold support at $152.60.
Image Source: TradingView
The price action chart for HCA Healthcare HCA
showcases a bull flag formation, with potential for a breakout
above $308, and the need for alternative options emerging below
$302.
Image Source: TradingView
The technical chart pattern in Netflix NFLX
presents a convincing bull flag formation, with confirmation of a
breakout above $566, while a need to wait for another opportunity
may arise below $550.
Image Source: TradingView
Meta Platforms META
continues to present bullish patterns, registering an extraordinary
18-month performance. Persisting with the trend, it witnessed a
substantial earnings gap up and is forming a bullish pattern. A
breakout above $474.40 is expected to attract more buyers, while a
reversal or decline below $453 would warrant waiting for another
setup.
Image Source: TradingView
Final Thoughts
Maintaining a Trading Plan and Risk Management Strategy
Even the most robust trading setups undergo downturns. Hence, it is incumbent upon traders to emphasize the development and adherence to a solid trading plan, coupled with the implementation of stringent risk management protocols.
Good luck this week traders!
Long-Term Investing Amid Volatility
Amidst market volatility and economic uncertainty, long-term investors are often advised to hold steadfast to their investment strategies. The renowned Zacks Top 10 Stocks for 2024, curated by Sheraz Mian, Director of Research at Zacks, have displayed tremendous resilience and success, significantly outperforming the S&P 500 since their inception in 2012.
Mian holistically assessed a pool of 4,400 companies tracked by the Zacks Rank, handpicking a robust portfolio of 10 stocks poised for substantial growth in 2024.
Prioritizing Prudent Investment Decisions
The essence of prudent investing lies in the careful selection of stocks and funds with robust growth potential. Zacks Investment Research continues to offer invaluable insights and industry analysis, aiding investors in identifying top-performing options for their portfolios.
Additionally, prioritizing in-depth stock analysis is exemplified by Zacks’s provision of free stock analysis reports for companies such as Netflix, Inc. (NFLX), The Clorox Company (CLX), HCA Healthcare, Inc. (HCA), Meta Platforms, Inc. (META), and ETF Research Reports for Invesco QQQ (QQQ).