Monday’s Market Recap: Four days of rally came to an end. Stocks in some sectors, especially financial and technology, have gone too far too fast. So, this pause (pull back!) is rather considered a good sign. The day started great with Dow gaining over 150 points by mid-day with financial sector stocks flying high . However, the sellers came out in the afternoon session and pushed the financial and technology stocks down, and so went the major indices, down losing steam.
Dow and S&P gave up all gains and ended the day almost flat. It could have been worse. Hey …. it was the anniversary of the fall of BSC which started all this mess! Dow closed at 7217 (range 7206 to 7393) losing just 7 points or 0.1%. S&P also had a similar trend, closing at 754 (range 753 to 774) losing 2.7 points or 0.3%. Nasdaq shed a bit more, -1.9% or 27.5 points, and closed near day’s low at 1404. For the day, Nasdaq traded between 1402 and 1445.
TaurusTrader added BX, AMR, and WFC to swing portfolio. SOHU was stopped out. Since the stop was raised over the weekend, we came out almost even with a loss of just 0.3%. In fact, SOHU came within 20 cents short of hitting its target ($50.50) last Thursday. So was CPRT, which came within 5 cents of target ($30.30) before retracing! It is not fair …. but, I understand is just a part of vagaries of trading! DRYS, added to the focus list on March 11, is dropped from the watch list. It failed to hit buy limit within 3 days after placed on the list.
Among the day trade picks – FAS, BAC, and MS gave great profitable setups. As discussed in earlier posts, I follow 10-min chart for day trade setups.
Picks for Tuesday, March 17: It is a “triple winch” week for options. I expect the choppy trend to continue throughout the week. Market internals look OK. It is likely that 741 (November 21 low) on S&P would be defended. Please watch out …. there appears to be some sector rotation beginning to happen. Money is moving out favored sectors like financial, technology, precious metals, etc in to less favored sectors, such as ag and fertilizers, air lines, shipping, refiners, etc.
There are some positive signs that the economic activities around the word is showing signs of recovery. I expect companies that make it happen in early stages are expected to benefit immediately, such as copper producers, dry bulk shippers, railway and trucking companies, etc. Copper price is increasing which generally indicates increase in industrial and construction activities. Shipping activities involving essential products across globe is picking up. Further, I also think that Ag seed, chemical, and fertilizer companies will pick up momentum as planting season in North America is about to begin. These companies will generate more than 60% of their revenues in the next couple of months selling seeds, pesticides, and fertilizers to farmers. So, I’ll be keeping an eye on the following companies for the next few days –
- TCK – Producer of copper and other metals
- SBLK, DRYS – Dry bulk shippers. SBLK reported good earnings after the markets closed on Monday.
- ABFS, YRCW, CSX, GBX – Railway and trucking,
- AGU, SYT, MON, TITN, ADM – Ag seed, chemical, fertilizer, and equipment companies
- WNR, VLO – oil refiners
Swing trade picks for Tuesday are:
- WNR – buy above $11.80, Target 13.60, Stop $10.95
- TCK – buy above $4.41, Target $6.50, Stop $3.75
- AGU – buy above $37.50, target 41.50, Stop $34.50
I’ll also closely watch the following stocks for day trade opportunities:
FAS, BAC, MS, VLO, MON, SYT, DUG, and SBLK (earnings play).
If there are questions or comments, please do post.