Trading Plan: 7 April 2022. Nasdaq (-2.22%) gapped down yesterday… | by Laurentiu Chisca | Apr, 2022 – DataDrivenInvestor

Nasdaq (-2.22%) gapped down yesterday with important volumes and found support at the ~13800 (near the black line in the middle) and SMA50. As already written in my previous plans, the area between SMA200 and SMA50 is to be watched now for trend confirmation. A break under the SMA50 might send the price lower and lower as there is a void until ~12570.

SP-500 (-0.97%) also had a distribution day and closed under the SMA200 as Fed Signals a faster pace of rate increases. Losing the other main averages (EMA21 and SMA50) might send the price much farther down to the February / March lows.

In the news

Fed officials are interested in 0.5% rate hikes to arrest inflation more quickly and plan to shrink the balance sheet by $95 billion a month.

Tech Stocks Sink, Bonds Sell-Off as Investors Study Fed Minutes.

A fertilizer shortage, worsened by the war in Ukraine, is driving up global food prices and scarcity.

Porsche ups its investment in ‘e-fuels’ for the EV transition with a stake in a manufacturer in Chile.

Google Bans Apps With Hidden Data-Harvesting Software.

Sectors

  • Best yesterday sector: Utilities, then Healthcare. Worst sector: Consumer Cyclical.
  • Best weekly sector: Utilities, then Consumer Defensive. Worst sector: Technology.
  • Best monthly sector: Consumer Cyclical, then Healthcare. Worst sector: Energy.

Sentiment

  • NAAIM (weekly, neutral between 70 and 90): 79.72
  • VIX (neutral under 20): 22.10
  • Equity Put / Call Ratio (neutral between 0.7 and 1): 0.94
  • CNN Fear & Greed: 48 (Neutral)

Breadth

  • Stocks above SMA40 (neutral between 30 and 80): 47.72%
  • Stocks above SMA200 (neutral above 30): 34.70%
  • Number of stocks that increased yesterday by more than 4%: 124
  • Number of stocks that decreased yesterday by more than 4%: 511
  • McClellan Oscillator (neutral between -100 and 100): -49.69

Earnings Reports

Tilray ($TLRY) opened yesterday 10.55% higher after announcing a surprise profit in the third quarter.

Noteworthy earnings reports for today:

This is not an ideal market to swing trade as many watched stocks gapped down and now it takes time to form solid bases (this increased volatility time is better for day traders, especially for the ones using the “gap and go” strategy).

Even for shorting, it is better to form some support first and then pull the trigger once the price breaks under that level.

Just watching.

Chevron ($CVX) is showing good RS while forming a good pattern. If the market turns up, a price above the black line might work. Stop Loss at EMA21.

Do your due diligence if or when placing a trade. All ideas stated here are my own and do not represent trading or investment advice.

In order to learn more about trading, you may want to read:

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