In this post, I’ll focus on setups that I’m monitoring for both long and short positions. With a chart and short write-up, this is a quick way to scan and plan potential trades.
These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup. Live alerts are sent to Traders Hub members only.
Stock Market Update
Uncertainty over events in the Middle East is causing a spike in volatility across energy markets. Oil surged to nearly $120 per barrel to start the week before falling back to $86 currently on reports of a coordinated release of strategic oil reserves from several countries. The International Energy Agency (IEA) announced that a record 400 million barrels of oil will be released, or about a third of total emergency reserves. While the move may immediately weight on sentiment around oil prices, the reality is that it will take time for the oil to come to market. The impact on oil prices will have a spillover effect to the stock market, where the S&P 500 has become very negatively correlated with oil price movements (chart below).
While the pullback in oil prices following the surge to $120 helped boost stock prices, technical conditions were aligned for a rally as well. As I outlined in the The Market Mosaic, futures tied to the CBOE Volatility Index (VIX) triggered a signal pointing to extreme fear while short-term breadth approached oversold levels. Other positioning data suggests that substantial buying pressure could boost the stock market on durable signs that tensions are easing and energy products could start flowing through the Strait of Hormuz once again. That’s because hedge fund short exposure in macro products is hitting the highest levels since 2022’s bear market (chart below).
With so much headline risk and volatile price action in equities, we’ve remained slow to add new exposure while trailing open positions with moving averages. The best thing to do in this environment is search out relative strength within new basing structures, as those stocks could be the new leaders on the next uptrend phase. Keep reading to see:
Open ETF positions.
Open stock positions.
Chart analysis for new trade ideas.
