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Issue #753 
Feb 20, 2022 | Newsletter
The newsletter with chart analysis for stocks and stock indexes |
Stock Indexes Analysis/Evaluation
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| Traders Keying on the Russia/Ukraine Conflict. Market to move on that alone this week!
DOW Friday closing price - 34079
All the indexes continued lower as the threat of a Russia/Ukraine war increased. As long as the threat remains, the bulls will be playing a defensive battle. On Friday, the DOW, the SPX and the NASDAQ all generated a new sell signal or a new failure signal (the NAZ), which means that the bulls need to generate a positive weekly close next Friday or the bears will take full short-term control of the market. The signals given on Friday were by only a few points (DOW by 186 points - 34070 vs 34265, the SPX by 9 points - 4348 vs 4357, and the NASDAQ by 32 points - 14009 vs 14041), meaning that if there is any buying interest, the break will be able to be negated by next Friday. Nonetheless, the possibilities of the war beginning are extremely high, suggesting that it is highly likely that the indexes will continue lower.
The weekly closes in the indexes are important (and do show weakness) for the "short-term but the intraweek spike lows seen 4 weeks ago have now become strongly pivotal in determining the midterm-to-potentially-long-term movement of the index market. In the DOW, the pivotal intraweek support is at 33150, in the SPX it is at 4222 and in the NASDAQ it is at 13724. If those levels get broken, the traders will be totally convinced that the 13-year bull trend is over and that a downturn has started. The bears will gain full control of the market for the midterm to long-tem. Given that during the 13-year uptrend the NASDAQ appreciated over 1600% value, a 50% downturn is within the possibilities. As such, a possible downside objective in the index would be around 9000, which would likely be reached over a period of 3-5 years.
For this coming week though, the action will all be based on what happens in the Russia vs Ukraine confrontation. If nothing positive happens (most likely scenario), the attention will then be on how much economic damage on the world such a confrontation would likely have and how that damage will be evaluated and shown on the charts. Simply stated, the intraweek support levels mentioned above are "key" to how the market will act over the short-term, midterm and long-term.
There is nothing else to talk about unless the tensions between Russia and Ukraine ease. The market is 100% keyed on that right now. Fundamentals, reports, and potential evaluation on the outlook for the economy for the rest of the year have been put aside for now, and will be until some resolution either way (war or peace) gets determined. At that time, the traders will dedicate some time on what that resolution will actually mean to the market.
For now, the bears are in control and further downside is expected to be seen this week. With the pivotal intraweek support in the NASDAQ being at 13724 and the index closing on Friday at 14009 and closing near the low of the week and further downside below last week's low at 13918, it is evident this index will be the one the traders key on this week for clues.
OIL generated a negative reversal week and closed in the lower half of the week's trading range, suggesting that further downside below last week's low at 89.03 will be seen this week. If that happens and another close below the previous week's close at 93.10 occurs, the important and pivotal resistance from 12 years ago at 92.72 will have occurred, meaning that level will now be strengthened. There is quite a bit of confusion as to what effect on the price of Oil will the Russia/Ukraine conflict generate. As such and at this time with the information presently available, a trading range between $89 and $96 is what is still expected. Nonetheless, nothing is set in stone or have a high probability of occurring (to the downside or upside) until something actually happens in that conflict. As such, this chart evaluation on Oil is not dependable.
DOLLAR chart has nothing new to report. As such, the previous week's chart evaluation remains viable.
BITCOIN generated a new sell signal, meaning the recovery rally has run its course for now and a correction back down to test the recent lows and attempt to build a new support level is what is happening. On a weekly closing basis, the 35103 level is short-term (to even perhaps midterm) pivotal. Bitcoin is presently trading at 38377. There is no way at this time to evaluate what a Russia/Ukraine conflict will bring the table. As such, it is more about "looking to see" than it is about "acting on the action" at this time.
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Stock Analysis/Evaluation
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CHART Outlooks
I have no mentions at this time and will not have any until some resolution of the Russia/Ukraine conflict occurs. This situation is untradeable from a chart point of view and with the chart breaks that did occur this past week. This is now a fundamental situation that is unique and without precedence in the reaction that will be seen by the market.
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Updates
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| Updates on Held Stocks |
Closed Trades, Open Positions and Stop Loss Changes |
| The updates at this time are somewhat undependable due to the Russia/Ukraine scenario. There are some held stocks (such as Gold Stocks) that are reacting specifically to it but with no clear resolution or view on what is actually going to happen, there is nothing I can say that is dependable at this time. As such, the updates on this newsletter will be all about defense of the held stocks and not about potential gains. In general though, the comments on the held stocks today are short and with less information than I usually give as the market overall is going to be more involved in the conflict itself than on any individual stock. As such, most stocks not sensitive to the conflict are not likely to do much. The others that might be sensitive, I have given some additional information. AU generated a multi-month breakout that should generate new upside, meaning that on a daily closing basis, the 22.00 level is now support. A close below that level would be a momentum stopper and at this time and under these situations, that should not happen. BTZI did nothing new and therefore the same scenario as stated the week before remains. This is not a stock that should react to the conflict in either direction. The stock remains in the same sideways trading range between .03 and .05 that it has been on for the past 9 weeks. Until one of those two levels gets broken, the stock will continue without direction. CALM remains in a breakout. A daily close below 41.89 would be a negative. DDD bulls have been unable to make any kind of a statement and with the red weekly close, the bulls are on the defensive again. Nonetheless, unless a daily close below 16.03 occurs, there is really nothing that should be done unless you want to reduce exposure to the market. ENG is not a stock that should react in either direction to the conflict. As such, the same chart evaluation as given last week remains in play. There really is nothing to be done here until the company reports earnings in 3 weeks. FSLR continued to show weakness, having generated another red weekly close (the 16th in a row). There is nothing to be done here unless the 66.65 stop loss gets hit. Nonetheless, this stock could actually gain some traction if Russia invades Ukraine and as such, the probabilities favor the bulls. IDCC closed on the 200-day MA on Friday and any further weakness will be a negative. If 64.94 gets broken, liquidating the positions should be done. NEM looks very positive and there is no level close by that would show weakness. PLNHF is not a stock that should be sensitive to the conflict. As such, follow the parameters given on the mention. SNDL Is not a stock that should be sensitive to the conflict. As such, use last week's chart update for the stock. The stock did nothing new this past week. SRUTF continues to weaken as it made a new weekly closing low at .02. Nonetheless, there is nothing to be done with this stock at this price. TRIP generated a red weekly close that prevented the bulls from making new strides. Nonetheless, nothing negative of consequence occurred and this is not a stock that is likely sensitive to the conflict. As such, nothing to be done other than following the initial mention. ZLAB generated yet another green weekly close and got up close to the weekly close resistance at 60.53 with a close on Friday at 59.33. This is a stock that could actually benefit from the conflict as it is a Chinese stock and China is seemingly supporting Russia in this war. As such, Chinese stocks might have an advantage over U.S. stocks at this time.
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1) SNDL - Averaged long at .905 (2 mentions). No stop loss at present. Stock closed on Friday at .575. 2) DDD - Purchased at 18.71. No stop loss at present. Stock closed on Friday at 17.59. 3) SRUTF - Averaged long at .0738 (3 mentions). No stop loss at moment. Stock closed on Friday at .02. 4) BTZI - Averaged long at .0935 (4 mentions). No stop loss at present. Stock closed on Friday at .034. 5) ZLAB - Averaged long at 125.95 (4 mentions). No stop loss at present. Stock closed on Friday at 59.33. 6) AU - Averaged long at 26.106 (6 mentions). No stop loss at present. Stock closed on Friday at 22.00. 7) NEM - Averaged long at 60.137 (4 mentions). No stop loss at present. Stock closed on Friday at 67.67. 8) ENG - Averaged long at 3.378 (5 mentions). No stop loss at present. Stock closed on Friday at .9545. 9) CALM - Purchased at 34.99. Stop loss at 33.65. Stock closed on Friday at 42.71. 10) IDCC - Averaged long at 69.475 (2 mentions). Stop loss now at 64.84. Stock closed on Friday at 65.77. 11) FSLR - Purchased at 67.90. Averaged long at 73.76 (3 mentions). Stos Loss at 66.55. Stock closed on Friday at 68.57. 12) TRIP - Purchased at 26.74. Averaged long at 26.205 (2 mentions). Stop loss at 23.42. Stock closed on Friday at 27.97. 13) PLNHF - Purchased at 2.92. No stop loss at present. Stock closed on Friday at 2.82.
Previous Newsletters
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Encyclopedia of Chart Patterns. A must have for chart aficionados! |
The opinions and commentaries by Mr. De Vito are not a recommendation to buy or sell, but rather
a charting guideline, based on his own knowledge and experience, regarding the stocks he is following or
that are brought to him by others. Mr. De Vito does not presently offer a track record of his trading experiences.
No inference of success and/or failure should be assumed. The
information enclosed above, regarding his background, length of trading, and experience, is correct
but is not meant to suggest, state, or infer any future success in trading, based on his opinions. The information herewith included should only be used by investors who are aware of the risk inherent in securities trading. Mr. De Vito accepts no liability whatsoever for any loss arising from any use of the information and/or comments he supplies. |
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