The Weekly Selection: 01/29/2023
Volume 023
Hello fellow investors,
After a productive past few days in the markets I am pleased to come back in here to do it all again this upcoming week. SPY 0.00%↑, for the first time since march 2022 has closed over its 50 week moving average. For those who are unfamiliar, this is a traditionally a good indicator of price continuation. As you will see in the chart below, SPY 0.00%↑ has tested and failed this moving average 3x.
Its worth noting as well how far the 10 and 20 moving averages were from the SPY 0.00%↑ price when these tests occurred. Unsurprisingly, this breakout comes when the aforementioned moving average price lines were closest to the 50.
This type of moving average stacking and tightening is often times an indicator of a large move ahead in the direction the price breaks away from the averages. If we are able to hold this average, or even start to move up I think there’s a likelihood we get a tradeable run.
For those looking for more long term market outlooks, I cannot be certain on the longevity of this run with such a fragile environment around the world, but I personally will continue to add to my portfolios and allocating funds in my IRA to broad market indexes VTI 0.00%↑ and VYM 0.00%↑.
Quote of the week:
“The difference between interest and commitment is the will not to give up. When you truly commit to something, you have no alternative but success.”
- Mark Minervini, multi-champ U.S. Investing competition.
This quote is less so about the market and more so about us as traders and investors. Times are tough right now unless you have multiple millions of eggs in a warehouse somewhere waiting to offload. Its critical to stay consistent in this time if you truly believe in the long term success of yourself and your positions/strategies.
I write this newsletter for not only all of you, my readers, but also myself so I can look back on my thoughts at different times in the market cycle. With that said, this quote has been beneficial for me in helping keep my head on straight and driven in what I believe to be the right direction.
Past Performance:
Past performance is back! After my weekend in Arizona, I am back at my home setup with all my newsletter tools and resources. Below is the performance from my individual stock picks over the last week:
4.47% on the week for an average return. This beat the stock market by nearly 100%, which claimed a nice 2.26%. Biggest winners were CRDO 0.00%↑ and MBLY 0.00%↑, both of which are IPOs from the last year which I mentioned in last weeks article as being significant. Funds and firms are looking for the next true market leaders for the next bull cycle. These small/mid caps that have good sales growth through an economic downturn have been getting lots of love for this reason.
Charts:
Now onto my watches for this week. I will keep it light again this week as I think its best for myself that I don’t get lost picking 10 stocks and only trading 2. Instead I will pick a couple and really focus on them.
PI 0.00%↑ closing above all moving averages this week. PI 0.00%↑ has been a strong market leadership contender for close to a year now and with earnings coming up I think theres some meat still on the bone to be had. Additionally there has been a significant inflow into Chip manufacturing stocks and PI 0.00%↑ is right there at the forefront.
ADI 0.00%↑ is a slow mover but that setup looks pure. Will likely take options on this one as opposed to shares.
ANET 0.00%↑ closing over all moving averages on the weekly + showing relative strength to the market. Relative strength is one of my favorite indicators of price continuation and any move up in the broad market is exacerbated by these already strong companies.
$RH. I entered this one last week and the chart is looking great. It seems I have a love for luxury furniture as 2 of my biggest holdings in my swing port are ARHS 0.00%↑ and $RH, both in the group. Similar to the way people have not stopped buying $LVMH (louis Vuitton) it seems they haven't let up on $20,000 couches either.
That’s all for this week everyone!
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Thanks for reading,
Tanner
Gold