Power Trading and Markets – February 21, 2020
The Virus Bug That Won’t Go Away
Welcome everyone to another week of trading at Yellow Tunnel. I and my team are committed to improving members’ trading psychology, awareness and trading skills that generate aggressive trading strategies, resulting in a high percentage of consistent profits. We strive to provide the right set of tools and trade discipline the lead to real financial success within our trading portfolios while also providing for a rewarding experience.
CURRENT TRADING LANDSCAPE
The market has entered a consolidation phase. The SPY and QQQ sold off on Thursday, for no specific reason other than the market is vulnerable for a short-term correction.
I expect market volatility to persist. I would not chase the market at these levels and I am waiting for SPY to retest the $330 level. Based on the stock forecast toolbox model, SPY might reach a $340 level on the upside. Going forward, I expect the market to trade between $330 and $340 levels.
I only expect shallow pullbacks starting next week. Please follow key support levels on TLT ($142), GLD ($145), and DXY ($98). As long as these support levels are intact, the market is prone to shallow pullbacks . I remain bullish on the pullbacks, as long as the market is above $330 level. Aggressive short-term buyers should consider buying near $330.
As the market undergoes some back and filling, traders will have several opportunities to profit from the hot 5G tech sub-sector that has been generated a lot of buzz and profits as this next-generation wave of wireless network speed is rolled out this year and for the next three years. There is great promise for the leading stocks in this space supported by aggressive and heavy fund flows.
5G technology will use a higher frequency band versus the current 4G technology standard, resulting in faster transmission of data. Being able to transmit copious amounts of data at a faster rate is certainly of benefit for wireless companies and their users, and 5G technology will be a major disruptor in various industries.
The best way to play the sector as a whole is by trading shares of the Defiance Next Gen Connectivity ETF (FIVG) – which has rapidly become the go-to ETF for traders and investors alike.
The Defiance Next Gen Connectivity ETF is the first ETF to emphasize securities whose products and services are predominantly tied to the development of 5G networking and communication technologies. FIVG does this by tracking the BlueStar 5G Communications Index, and FIVG attempts to invest all, or substantially all, of its assets in the component securities that make up the Index.
The top ten holdings for FIVG listed below make up just over 40% of the fund’s total assets. Depending on the fundamental and technical analysis, the fund managers will actively adjust individual weightings and which stocks to buy and sell. As is the case with most ETFs, this is not a static portfolio.
Looking at how shares of FIVG currently trade, following a late January pullback, FIVG has rallied back up to its 52-week highs during February before pausing this past week with the broader tech sector. Volume has picked up considerably the past two months indicating strong interest and rising liquidity.
Trading less than a point off its recent all-time high, if and when FIVG clears $27.50 it should be in motion to trade well higher as this will represent a fresh upside breakout. I view the whole 5G theme as one that traders should embrace and look to aggressively take advantage of. There’s a lot of money to be made in 5G and I intend to make the 5G sector an integral part over the overall sphere of what areas of the market are best to trade.
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TRADE OF THE WEEK
One of the most important aspects of the whole buildout of 5G infrastructure is to enhance networks to move data smoothly and seamlessly through the wireless Internet and avoid data bottlenecks. While this might sound obvious, it’s a very complex task being that much of the current wireless structure is in place and in need of massive upgrading.
One company that provides what is known in the industry as “plumbing software” is Akamai Technologies (AKAM), a company that started out of MIT University. The company offers its Intelligent Edge platform that provides policy-based, software-defined tools that are designed to allow enterprises to maximize the level of performance, reliability, security, and cost of every application, based on identity and context across a variety of architectures, sites, and apps.
Akamai Technology shares rose to an 18-year high of $103.34 after the cloud and business services company topped Wall Street estimates. The company reported fourth-quarter net income of $119.1 million, or 73 cents a share, compared with $94 million, or 57 cents a share, in the year-ago period. Adjusted earnings were $1.23 a share. Revenue rose to $772.1 million from $713.4 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of $1.13 a share on revenue of $749.3 million. So, it was a nice beat on the top and bottom line.
The stock gapped from $97 to just over $103 on the earnings news and is consolidating that breakout move as the market is coming in from its recent runup. One of our AI tools, the Stock Forecast Toolbox gives Akamai stock very high marks, a solid A rating with a near-term price target of $112.
To trade Akamai effectively, make sure to sign on as a new member of our Aggressive Power Trader service to be ready to act when our signals give us the green light.
I’ve traded AKAM successfully before and intend to work with this stock and the corresponding options, so don’t miss out when it’s time to trade this hot name. My AI tools pinpoint specific bands of entry and exit points that provide the ability for traders to be nimble and consistently profitable.
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 major element 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 stock candidates well ahead of when I’m going to execute my best ideas the next day. It’s my TOP STOCK watch list of trading candidates with the various parameters that I use to trade each trade with defined risk levels, entry points and projected exit prices.
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 Watch List.
I’m only showing a few stocks and ETFs that made up our Thursday night Watch List, so there are plenty of trading opportunities in stocks, and ETFs to put to work on a daily basis. There are typically 10-12 trading strategies to consider.
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.
Trading Thoughts: 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 available anywhere in the market today.
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I 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.
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Trading thoughts on our trading model :
Within our Aggressive Power Trader trading stock watch list, trades are recommended in our Tradespoon Live Trading Room the next day.
Aggressive Power Trader 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.