Mosaic Chart Alerts
Mosaic Chart Alerts
Long & Short Trade Ideas
Welcome back to Mosaic Chart Alerts!
In this newsletter, I’ll focus on the best 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 trade ideas.
And to select these ideas, a lot of work goes on behind the scenes to find stocks offering the right combination of fundamental attributes along with a proper chart setup.
These are my notes from a shortlist of setups I’m monitoring.
Weekly Recap
Price action over the last week is favoring the setups in our long ideas. DY is the only stock to show signs of breaking out, but shallow pullbacks just below resistance is creating great setups in other names like EVH. Adding ENPH and GPC to this week’s watchlist, both with ascending triangle patterns to follow. Our short setups tested support levels but never closed below my price level to trigger a position, like with JWN and LNG.
Long Trade Setups
DY
Starting to break above the $100 level highlighted last week. Also encouraging to see yesterday’s move happen on a strong uptick in volume. Starting a small position, with the 20-day moving average as a stop.
EVH
Evolent Health (EVH) is still on the verge of triggering a buy signal. As noted, this stock has been basing for a move since October and ran back up to the $35 resistance level. Pulled back to the 50-day, which also reset the MACD. Recharging for a breakout move.
ENPH
Carving out an ascending triangle pattern since April, with $220 as my breakout level. If this pattern completes, watch how the stock price reacts at prior high at $270.
GPC
Another ascending triangle pattern that would take the stock to new highs if it completes. Resistance at the $141 level touched four times since the start of the year, making it my breakout level to watch.
HALO
Constructive action pulling back to the 20-day moving average after touching resistance at $52, where a close above remains the breakout level I’m watching.
Short Trade Setups
KALU
Setting up a bear pennant continuation pattern. Using a close below $70 to consider a short position.
SPWR
This stock is progressing through a triangle continuation pattern near the lowest trading levels of the past two years. The $14/$15 level is very important support going back to 2020. A close under $15 is my first trigger.
Rules of the Game
If you haven’t noticed yet, I trade breakouts! I trade based on the daily chart for long positions. And for price triggers on long setups, I tend to wait until the last half hour of trading to add a position. I find that emotional money trades the open, and smart money trades the close. If it looks like a stock is breaking out, I don’t want a “head fake” in the morning followed by a pullback later in the day.
Also for long positions, I use the 20-day exponential moving average (EMA) as a stop. If in the last half hour of trading it looks like a position will close under the 20-day EMA, I’m usually selling whether it’s to take a loss or book a profit.
For short (or put) positions, I trade off a four-chart instead of a daily. Why? There’s a saying that stocks go up on an escalator and down on an elevator. Once a profitable trade starts to become oversold on the four-hour MACD, I start to take gains. Nothing like a short-covering rally to see your gains evaporate quickly, so I’m more proactive taking profits on short positions. I also use a 20-period EMA on the four-hour chart as a stop. If there is a close above the 20-period EMA, I will cover my short.
For updated charts, market analysis, and other trade ideas, give me a follow on twitter: @mosaicassetco
Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this newsletter.