Power Trading & Markets– January 26, 2020
Power Trading & Markets– January 26, 2020
A Week of Selling is Constructive for the Bull Trend
Welcome every one from myself and the Yellow Tunnel crew. Our goals are to hone and sharpen trading psychology, awareness, and skills that produce consistent profits resulting in a compounding of wealth in traders’ portfolios. We bring to the aggressive trader a set of tools and trade discipline that is second to none and we’re highly confident about our ability to deliver on these promises.
CURRENT TRADING LANDSCAPE
The market continued to make an all-time high into Friday’s down session despite ongoing fear of the spread of the virus in China. Semiconductors have led all sectors and sub-sectors. Shares of Intel pushed to a multi-year high following strong Q4 earnings accompanied by upbeat forward guidance.
The market outlook for the next four weeks is slightly different. I expect shallow corrections in the next two weeks and the bull trend to be intact. However, the market is approaching overbought levels we have not seen for a few months, and the market is due for a short pullback by the end of February. We are remaining buyers on the pullbacks as long as the market is above the 50 days MA on SPY.
Please watch 320 and 325 support levels using SPY. I updated the Aggressive Power Trader list. I added LRCX and few other stocks to the watch list. I predict the semiconductor sector will outperform the stock market in the next five days.
SECTOR SPOTLIGHT
This week, I want to pay some particular attention to 5G and the promise of what 2020 will mean to investors that dedicate a portion of their investment capital to this massive buildout that will make possible Internet of Things (IOT), Artificial Intelligence (AI), Autonomous Driving, and the transfer of data to the cloud at 100 times faster than 4G technology is able. And these are just the most obvious applications among vastly more that address industrial, transportation, medical, utilities, and finance.
Fortunately for certain investors that only like to invest in ETFs, there is a handful of dedicated 5G ETFs to work with – my favorite being the Defiance Next Gen Connectivity ETF (FIVG). The largest holding in FIVG is one of our top-performing stocks within the– NXPI Semiconductors (NXPI) which has returned +17% to our members in less than two months.
Some of the more high-profile holdings include Qualcomm Inc. (QCOM), Analog Devices Inc. (ADI) and Skyworks Solutions (SWKS). However, seeing some of the mid-cap and smaller outlier 5G stocks race higher is giving the sector even that much more credence. Shares of Teradyne Inc. (TER) and Qorvo Inc. (QRVO) traded to 52-week highs following strong earnings beats. So, there is widespread prosperity in the 5G sector this is seeing strong fund flows.
Shares of FIVG are tracking very well, trending along its 10-day moving average like clockwork. Such a strong chart demonstrates the widespread participation of the underlying components both from a fundamental and technical standpoint.
The best part of the 5G investment theme is that the buildout of 5G networks and the transition of connected devices to 5G is in the early stages. There is a lot of runway for this sector to make traders tremendous profits for the next couple of years.
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TRADE OF THE WEEK
One of the biggest winners from the broad launch of 5G technology will be Apple Inc (AAPL) as the company rolls out its 5G enabled iPhone 12 that is projected to hit the market in September 2020. This will be a global upgrade cycle that will dwarf all previous iPhone releases. Twelve years after its initial release, altogether about 2.2 billion iPhones have been sold worldwide.
The fourth quarter of 2017 was Apple’s best quarter to date with 77.3 million iPhones sold. Apple is reportedly forecasting 100 million iPhone 12 units to be sold in 2020, which will make for a stunning fourth quarter. 2020 earnings are forecast to grow by 14% to $13.50 per share on a 6.2% rise in revenues to $276 billion. But those numbers may be low if sales of 5G phones hit the 100+ million mark.
My AI-driven Tradespoon Stock Forecast Toolbox gives Apple a Model Grade “A” rating this week with near-term resistance at around $329. I recently recommended Apple in our Active Trader premium service on January 21 and am considering it for our watch list as the market presents some buying opportunities in the next couple of weeks.
In a market that saw determined selling pressure come into Friday’s session, shares of AAPL traded to a new all-time high. This is a very impressive relative strength. The company reports earnings next Tuesday after the close with the Street looking for $4.38 per share in earnings on consensus revenues of $86.21 billion. Given the stock’s $1.4 trillion market cap against the $26 trillion capitalization for the entire U.S. stock market, it is going to definitely move the needle when they report.
We’re at a point in the rally where the market is looking for reasons to consolidate some of the gains, so getting proper timing for entry points is of the highest focus for our members. This also applies to taking profits.
In our new service Aggressive Power Trader, I walk our subscribers through the “trade decision-making process” with the mindset of being in and out of trades within 24-48 hours with the objective of booking 30%-60% gains against the amount of capital at risk on each and every trade with 75% accuracy.
The beauty of this service is that it provides tomorrow’s featured trades the night before so traders can analyze and work on how they might best want to participate. You get to examine well ahead of when I’m going to execute my best ideas the next day. It also makes available my watchlist of trading candidates with the various parameters that I supply to manage each trade with defined risk levels.
Each day at 8:00 PM and 8:30 AM CST, we provide our Top Bullish and Bearish Stocks, each with an Entry Point and projected exit price. Our signals are meant to last 1-2 days. Below are actual recommendations with parameters found on our Aggressive Power Trader Watchlist.
I want to highlight that each trade is targeted for a 1% gain, where in a month when there are 22 trading days, we can theoretically make 22%. In reality, my algorithms are, winning 75% of the time, where the expected return would be producing roughly 16% per month. On a cumulative basis, over the course of a year, aggressive traders can generate up to 200%, far outpacing the most successful hedge funds in history with minimal overnight risk.
We get there 1% at a time and do it on average every three out of four days. I posted last Thursday night that we would be buyers of Danaher Corp. (DHR) on Friday and the stock gained 1.0% in the early hours of Friday’s session. I’m only showing three of ten stocks and ETFs that made up our Thursday night Watch List, so there are plenty of trading opportunities in stocks, ETFs and options to put to work on a daily basis.
I also post details of our trading activity and updates on the Watch List at the bottom section of our daily blog. So, make sure to stay tuned in that service as well.
As a reminder, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room. I usually hold a position for 1-2 days and allocate no more than 5% of trading capital to any single trade.
I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position less than one day. I personally enter a position at predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of a stock price. I target 75% accuracy using these signals.
Through the Aggressive Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience that exceeds that of an institutional proprietary trading shop.
For those that have been trading alongside us for the past three years, their lives have been changed forever. A $100,000 initial investment when backtested has grown to nearly $1.75 million dollars. We’re helping everyday trades develop the skills of master traders empowered by the custom AI tools I’ve created and refined over the past decade.
We encourage all subscribers to view the instructional videos on how to best use your membership and invite our members to participate in live weekly strategy roundtable workshops that are archived in the event that they need to be viewed at a later time.
Our algorithms stand apart from all others and being we at YellowTunnel are targeting the retail trader as our audience, it is a special situation that gives every trader a serious advantage never offered before anywhere. And for our special introductory offer of ???, it should the first financial priority for 2020 of leveraging one’s financial success.
Go to our website at www.yellowtunnel.com and put Aggressive Power Trader to work today as we move through the earnings season. The greatest short-term potential for everyday profits is only found here at YellowTunnel.com.
OUR TRADING MODEL
Within our Aggressive Power Trader trading list, trades are recommended in our Tradespoon Live Trading Room as well as having access to my Watch List.
YellowTunnel is purposed to deliver high-visibility sector strength where a cluster of leading stocks are identified, coinciding with what we call a “10-day prediction momentum trade”. When we recommend a stock, ETF, or related option strategy, our time horizon is same-day in-and-out and up to five days max, at which time in the majority of trades, would be closed out.
When looking to execute recommended trades, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our Live Trading Room, I usually hold a position for 1-2 days and I usually allocate less than 5% of the portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be allocated if you hold a position less than 1 day.
For the best results, I personally enter a position at the predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of the stock price. I target 75% accuracy using these signals.