Fast Trade Alert: Chip! Chip! Chip!
Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness, and trading profits.
Some targeted selling on the earnings news took hold of the Friday session following a big week of high-profile earnings reports from the mega tech companies that dominate the index weightings. Among the FAANG and Microsoft releases, Netflix, Apple, and Microsoft all traded lower while Facebook, Alphabet, and Amazon all traded higher, making for a mixed bag that triggered some broader selling in the tech sector.
The tale of the tape simply confirms the pre-earnings season run-up for many market-leading stocks, and the resultant pullback should be of no surprise. Most of the 11 market sectors experienced similar to buy the rumor, sell the news price action that could make for a choppy month of May that I make note of in my technical take below.
As vulnerable as the market is for a garden variety correction of 10%, the overarching set of longer-term tailwinds remain very much intact. The Fed’s dovish fiscal policy, massive Congressional stimulus, bullish data on U.S. vaccinations, tame interest rates, and solid forward guidance by the majority of S&P 500 companies will set up the market for higher highs once a period of consolidation has run its course.
The $SPY continues to trade in the range between $410 and $420. The energy, the industrials, and the financial stocks (reflationary trade) led the market. The $DXY is reaching oversold levels and started the bottoming process. The $TLT is trading in the uptrend. A short-term key support level is at $410 and the market can potentially start the correction in the next two weeks.
CURRENT TRADING LANDSCAPE
Most traders are asking themselves “what’s the next big thing” to propel the markets higher. And since they aren’t seeing something bullish the market doesn’t already know, it triggers knee-jerk selling, even in stocks where the quarterly results would seem to support higher prices. It’s just temptation to raise cash and sell extended winners into strength and look for lower entry points to buy back into the favorite names.
I would consider raising cash at this point as the best part of the recent rally is behind us. Based on our models, the $SPY can pull back 10-15% in the next 2-6 weeks. If you are trading options consider selling premium with September and October expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $416 level using SPY and "SELL" signal is at $422 for short term traders. Based on our models, the market (SPY) will trade in the range between $388 and $425 for the next 6 weeks.
NEW WEEKLY DYNAMIC POWER TRADER SERVICE
We recently launched our new Dynamic Power Trader service that we at Yellow Tunnel are very excited about. Each week, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
What makes this new service so special is that it offers real-time alerts via SMS and access to Vlad's live positions and order. When I put together this system, I wanted to be in the fight with other investors. That’s why I don’t play on your emotions to sell newsletters - I put my money where my mouth is.
Every trade recommendation that I make using this system – comes straight from the list of trade recommendations I use myself.
Not only that but every trade I make is logged in detail for you to review at any time. You can see my entire trading history, updated LIVE so that you can see, learn from, and even copy my trading strategy.
Our Weekly Power Trader service continues to power up great trading profits. Each week on Sunday, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop at 2% of the stock price.
Signals have averaged over 86% accuracy in my live trading since inception. Sometimes we hold positions 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. The green color should be interpreted as a bullish signal and the red color as a bearish signal.
How To Use Our Signals
Once you become a member, I encourage you to review our Live Trading Room recordings to see how I trade Aggressive Power Trader signals in my account. A snapshot of how we produce our Live Trading Room Sessions shows how we pack in a lot of information that can be accessed from whatever device you’re driving.
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.
I allocate less than 5% of my portfolio if the position is being held overnight. On average, less than 1% of the portfolio should be at risk, if you own a position for less than one day.
I 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 stock price. I target 75% accuracy using these signals.
Few subscribers asked about Options trading using the signals provided. Please review live trading room recordings. I often sell OTM credit put spread using weekly options and collect 0.5% using stock price. For example, if the stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.
SECTOR SPOTLIGHT
One of the standout subsectors of the market’s rally has been that of the semiconductor and semiconductor equipment stocks. It’s hard to identify any other sector that has proven to be a consistently strong winning trade each time the sector has provided a buying opportunity.
This week, some notable selling among most of the leading stocks is once again giving traders a chance to get long some of the most reliable chip stocks at steep discounts to where they were trading just a week ago. The Van Eck Vectors Semiconductor ETF (SMH) is the most widely traded basket of top chip and chip equipment stocks that offers excellent liquidity and a very active options chain with tight spreads.
The top ten holdings of SMH make up about 63% of total assets and trade actively, about 3-5 million shares per day.
The three-month chart shows a very nice basing formation in the making, hugging the 50-day m.a., with resistance up at $260. This retracement to the 50-day should be a good entry point for those looking to trade the ETF as opposed to individual stocks, taking a lower-risk approach that removes single stock risk.
That’s a very impressive chart and one that we’ll consider adding to our daily trade recommendations for Weekly Power Trader subscribers.
At Weekly Power Trader, we apply our custom proprietary AI algorithms to every trade, giving us a serious edge on how and when to trade stocks and ETFs.
Shares of SMY offer traders a lower-risk method by which to trade a sector that has demonstrated strong resilience on every pull back.
TRADE OF THE WEEK
For those that want to trade single stocks in the semiconductor sector, one company that is extremely well-positioned for the balance of 2021 is NXP Semiconductor N.V. (NXPI). No other chip company is situated to benefit from the booming EV market than NXPI, and with the global chip shortage extending out much longer than the first forecast, the company will be seeing a rising record order backlog for the next couple of years.
NXPI’s first-quarter beat on the top and bottom lines with revenue up 27% Y/Y to $2.57B and EPS of $1.25, four cents above consensus. Automotive revenue was up 3% on the quarter and 24% Y/Y to $1.2B despite the ongoing global chip shortage. Industrial and IoT sales were up 52% on the year, mobile increased 40%, and communication infrastructure was up 4%.
As a top ten holding in SMH, shares of NXPI are well represented in the sector and provide a good level of volatility for traders to take full advantage of. Putting the six-month chart to the stock, we see shares of NXPI testing its 50-day m.a. as of Friday where the stock has shown good technical fortitude in prior tests.
When we apply the AI-driven Seasonal Chart we also get a bullish read on the forward prospects for the stock. Our AI model is predicting a potentially powerful move over the next 20, 30, 40, and 50-day periods. This makes for good trading stock and one that traders should pay close attention to our AI indicators.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades. By being a member of Weekly Power Trader, it’s these kinds of opportunities that our tailor algorithms provide our members to look forward to every day they put their risk capital to work on both long and short positions.
Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are green-lighted by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested as well.
Through the Weekly 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.
The beauty of our AI-driven system is that we are always equipped to bring new trades to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.
We really pride ourselves on this kind of discovery process, to bring trades with very high probability risk/reward parameters to members throughout each week. Our track record speaks for itself from a standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
The consistent performance of our Weekly Power Trader service is just incredible. Our 2021 YTD stellar performance is made possible by being right on 86.01% of all trades with an average profit of 35.56% per trade. To my knowledge, this trading performance is one-of-a-kind that stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.
Once you’ve become a member of any of our service – Weekly Power Trader or Aggressive Power Trader, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived in the event that they need to be viewed at a later time.
Traders seeking the most-timely directional trading strategies where over 86% of all trades are profitable should take action and come alongside the Yellow Tunnel community and make Weekly Power Trader and Aggressive Power Trader your go-to AI trading platform for no-excuses performance.
Our AI platform crunches all the data, generating a constant stream of trades with the highest probability of generating incredibly profitable returns available to the beginning, retail, and professional traders anywhere in the marketplace today.
Go to our website at www.yellowtunnel.com and make the Weekly Power Trader service your default trading system where the AI that powers my all-world, always thinking platform and make 2021 the best year on record for your trading portfolio.