Futures are down at the open for the third day in a row. The prior two gap-down opens presented buying opportunities in a number of leading stocks which then rallied off their intraday lows. In this instance we have to wonder whether the Rule of Three comes into play here and the indexes simply continue lower, perhaps after an initial intraday rally off the lows as buyers have been well-conditioned over the past two days to just "buy the dip," which has literally been the rallying cry of this market for some time now. Investors should look to play a strong defense here, remaining mindful of and sticking to absolute and trailing stops as necessary.
Focus List Notes:
ANET made a new all-time high yesterday. It was last buyable along the $200 price level based on Jesse Livermore's Century Mark Rule on the long side, per our discussion in the stock two weekends ago in our Focus List Review piece. The stock is now well-extended.
BABA should be monitored closely as it looks to be set to retest its 20-dema. A constructive pullback to the line would put the stock in a lower-risk entry position. Otherwise, a breach of the 20-dema could result in a test of the 50-dma, which would be our maximum downside selling guide for the stock.
CAT held tight along its 20-dema as volume dried up to -47% below-average yesterday, putting the stock in a lower-risk entry position while using the 20-dema your primary selling guide.
NFLX found support at its 50-dma and bounced off the line yesterday, but volume was weak at -36% below-average. The 50-dma remains the maximum downside selling guide for the stock, which is critical if the stock is to avoid becoming a late-stage failed-base situation as we discussed over the weekend in our Focus List Review piece.
TTWO was buyable per our comments over the weekend in our Focus List Review piece, and it came through with a move back above the 116.35 low of last Wednesday's buyable gap-up move. Technically it remains within buyable range of the BGU, but the optimal entry was to be found yesterday below the 116 price level early in the day per our weekend comments.
WB found support after a 50% retracement of the prior move from the 50-dma to the peak around 110, as we discussed it might in our weekend Focus List Review piece. Pullbacks into the 105 area, which has served as support for the stock over the past three days, remains buyable as long as they occur constructively.
Market Lab Report - Premarket Pulse 11/15/17
| Published: | 15 Nov 2017 09:28 ET |
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