Stocks To Watch: Earnings Season Begins

Hey everybody, it’s Pete. Welcome to Stock Trading Pro. Today’s stocks for breakfast is going to be a good one. We’re actually about to kick off. Earning season for the next three months. Let’s see what we got in store. Financial stocks are actually the big thing, but the biggest thing I want to talk about, and this is the very first thing we want to start out with before we head into the back of 2023, I want to show you a headline from The Wall Street Journal today and from Barron’s.

That you should know about, but don’t listen to. I just can’t express this any strongly, uh, based on how we normally trade versus what we’re reading in the headlines. Not the same all the time. And what I want to really warn you about right now is don’t let headlines scare you out of good ideas. We have a bunch of good ideas we’re going to talk about today.

We have some sector rotation we’re going to talk about today. We’re going to break it down into an industry group that has not been very tradable recently, probably in the last year actually lighting it up over the last, let’s say, two or three weeks, and got a bunch of stocks that are actually setting up for new lungs.

One of them is probably in the news every day, the last week or so way extended from the optimal entry. But we do have another one that is kind of resting perfectly at that spot. Big question that we’ve had also has tech stocks. Stop going up because they’re about to reverse, or are they just consolidating those big gains from the big AI mania that they had for Q1 and Q2 2023?

Right now, some of them we’re going to point out probably Nvidia at the top of that list as the biggest one. But first I want to point out the headlines and then we’re also going to walk our way through the three different types of lists of stocks that you could make for yourself. And actually an interesting one, which list of stocks?

Which type of stocks are the easiest stocks to buy and have the most confidence in? And how do you progress to more difficult stocks that you might not be ready for right now? But more importantly, how do you know when you could go over into those other lists of stocks? So, God, we got a lot we’re going to talk about here today.

Stick around, be back in just one second. Okay. So thank you so much for joining us. Bunch of things we’re going to talk about. Let me just get this off the screen here.

Okay. Hello. Technical mishap. But then, we want to talk about two things. First, we want to talk about some headlines, so let’s work our way into headlines and we want to talk about this, right? The Wall Street Journal today. Five ways the bull market makes investors scary. Now, obviously we got another headline here.

Very, very similar coming out of Barron’s Second quarter, earnings are coming, what that means for Stocks. So one of the biggest things you need to know right now is this week specifically at the end of the week, financials are kicking things off. Now we all know that the financial stocks, uh, beat the stress test recently.

So the, the list of stocks that we want to keep an eye on and we actually want to start out with, Uh, that list. Let me kind of hop on over here. To me personally, JP Morgan is the one that I am watching, and you can see it’s actually up a little bit, but this is really what I’m watching right now. This gap fill basically between 1 44 and let’s say one 70 is a pretty big move.

Now, a lot of these stocks, specifically JP Morgan City Group, Wells Fargo, Bank of America, they all passed that stress test in a big way recently. And these are kind of the, the, the more well-known stocks. Now, truth be told, we had a big conversation on Saturday in our weekend swing trade session that you need to start to dig into your p and l, your profit and loss statement, and pay attention to which stocks you actually make the most money in.

And for me personally, JP Morgan over the years has been one of the stocks that I have really, really loved to trade. And my p and l shows that. However, here’s one of the biggest things to keep in mind and is kind of working our way over into which stocks you should be trading. American Express, which is another stock in the financial area, and let’s take a look at that.

We’ve, we’ve been talking about the credit services companies that have actually been, uh, really, really strong recently. So we got. American Express, discover Capital One, like there’s a whole bunch of stocks, even PayPal to a little bit lesser degree, uh, which kept hugging the 50 period moving average quite a bid.

But I want to talk about American Express here for a second. So we have JP Morgan and earnings coming up and we have American Express, right? All within that financial bubble. I loved trading American Express. And then after digging into my p and l for the last three to six months, I’m like, wow. I don’t make money trading American Express.

So getting back to what we talked about before is the three different types of lists. Now, this is very important because volatility starting to get elevated a little bit. The VIX came off the bottom, spiked up to 17, 17 and a half. Volatility starting to come in, we’re going to have plenty of opportunities, but you got to be on top of where you’re actually making money.

So pay attention to which stocks you’d like to trade versus which stocks you’re actually making money in. So JP Morgan versus American Express was a pretty big lesson for me personally. The three different types of lists of stocks that there are. The first list is a smaller list of stocks that you might call your universe.

Now, when I first started trading back in April of 2023 years ago now, 23 years ago, plus we were only allowed to trade two stocks for the entire first part of our trading career. We had to learn those stocks like the back of our hand. And then when we started to be more profitable in those stocks, they kind of allowed us to expand the list and then learn those stocks.

And you’d have level two boxes all over your screen, and you’d be watching the tape. Now I don’t, I don’t trade level two. I don’t read the tape. In that micro timeframe anymore. However, I do have a list of stocks. Now, how big of a list that stock should be for everybody really depends on your experience.

How good are you at making distinctions? So that list could be anywhere from three stocks to 33 stocks. Those are the stocks that you watch every single day. Now, one thing I would suggest, and if you haven’t done this before, we’re actually going to take a look at, fin. So when you go over to fin, there’s.

And let’s just say you pull up a scan. So let’s say I’ll pull up, uh, a scan like this, right? So averaging a million shares per day average, true range over a dollar. This little thing over here called beta is basically measuring the volatility of stocks and how they move with the market. I would actually even go a little bit higher than that and go to a beta of one.

I would go to average true range over one and a half, and you could see that brought that down to 135 stocks. Now, that is still a gigantic list, but those stocks, if you get good at reading the market and you narrow down that list to, let’s say, for argument’s sake, Three stocks or five stocks, we call that list of stocks, your personal atm.

They’re the stocks that no matter what, you should have something to do in those stocks on a daily basis. Now, inside of our community, we have a list of roughly 14 stocks that we call market stocks, active stocks, and every single day, both from a day trading and a swing trading perspective, we pay attention.

To those stocks because pretty much if the market’s moving, those stocks are going to move. And we got a good question. Why aren’t we just trading the market if we’re trading market stocks? And it’s really because of percentage moves. When’s the last time you saw the market? Have a 15% move in one day? It doesn’t happen that often, but we see that quite a bit in some of the market stocks.

So that’s the first list. Build your own personal list of stocks. Again, if you’re brand new to the market, and I want to be clear about this, if you’re not profitable yet, I don’t care if you’re trading for 10 years, you’re still inexperienced if you haven’t kind of turned that corner. And typically it’s the types of stocks that you’re trading.

Second list is sector rotation. Find stocks in individual sectors. Maybe you know the sector well, maybe you just trade those stocks a little bit better. So if we keep going with the analogy of what we’re talking about with these stocks, with the beta, the average true range, the volume and how much they traded, you could then go a little bit deeper in, into maybe individual sectors where you might be just trading technology.

Maybe you’re trading consumers cyclical. Maybe you’re trading energy. So that’s the second way of doing that. Now, I want to overcome an objection that a lot of people talk about when we talk about breaking down these stocks. You think in your mind that narrowing your list of stocks is going to narrow your chances of making money narrow or make your list of opportunities smaller.

Nothing could be further from the truth. What’s actually going to happen is, and I want you to really think this through. Because you learn how those stocks trade. You learn the order flow. You learn the volume. You learn how to read the tape. You are good at identifying the optimal entry. You’re good at using a trailing stop.

You’ve learned those stocks and you understand how to trade them. Here’s where it gets special. When you have that deeper bit of knowledge in which stocks and how to trade them, you’ll then understand better than anybody when to stay away from certain stocks, when to focus on stocks, doing what they’re supposed to do, when to hold bigger and when to trade longer.

So in other words, bigger share size and went to hang on a little bit longer. A good recent trade that we had was Wayfair. Wayfair exploded, broke out. We, one of the stocks we trade every day, basically went from 23 up to uh, 43, up to 68, I believe. We could just take a look at that stock now because it’s one of the stocks that we’re watching pretty much on a daily basis, and it’s in our rotation.

We actually understood when to trade it, which was just a pretty simple breakout here. These melted candles. Indecision indecision. Indecision forced us to move up our trailing stop loss, and we ended up exiting on this pullback and we’re actually setting up a new trade every day. So that’s the second list.

The first one is build a small list of stocks that you learn every single day. The second list is sector rotation, and we’re going to dive into sector rotation for this coming quarter right now. And the third one, which is probably the most difficult, and I want to give you a little bit of a scan of what this looks like.

So if you go to Fin Viz and you go to the front page of the site, you’re going to see all of these different criteria, right? New highs, new lows, and every wedges and triangles and all that kind of stuff. Now, I want to be clear about this. Chart patterns are what everybody knows, right? However, we’re doing this to make money trading a stock that you have never watched before, simply because it popped up into a scan.

Is a very difficult way to have conviction in your ideas. Now, why is that so important? Well, raise your hand if you’ve ever had a great idea, moved in your favor, wiggled around a little bit, shook you out because you weren’t used to how that stock traded, and then did exactly what you thought. Conviction is earned and you earn that conviction by knowing your trades.

So if you want to walk through that progression right now based on what kind of results you’re getting in the market right now, there’s first building a universe and learning those stocks and amplifying your conviction because you know how those stocks trade. The second part is sector rotation, which is really a monster part of what we do, which is within the New York method.

A big part of that is sector rotation, order flow, and tape reading. I believe, and I think our community does as well, is by far the easiest way where you are literally just tracking the smart money footprints in and out of individual sectors go a little step higher than that industry group. So I’m going to break that down for you in a second as well.

Uh, and then the third one is just running scans. So if you are just running scans right now, or maybe reading headlines or trading those stocks and headlines, boy that is a challenging way to do it. So I would move up the top two. Universe of stocks that you create. And again, big question we get is how do you find that?

Well, look, go to the, go to the major sectors and pull up two stocks from each sector or maybe even one stock from each sector, and you’ll have either 11. Or 22 stocks that you like to trade, especially if they have higher beta. So you got universe, sector rotation stocks that hit scans. Now we’re going to work our way over into these headlines because I’m kind of leading up to exactly what I’m talking about.

Okay. So within the Wall Street Journal article today, Scary headline for lack of a better way of putting it about the bull market. Then you kind of work your way over here. Same thing into Barron’s basically talking about what’s going on with the bull market and is the bull market over kind of thing or are we just looking to take off?

This is why I started out with the list of stocks. Raise your hand if you missed some of the major moves that happened at the beginning of 2023 and then kind of really launched into the atmosphere in May of 2023. If you missed those moves, and my gosh, there’s so much talk on social media about, you know, some of the talking heads scaring people out of buying stocks.

You have to do your own trading, so, Use these kinds of things for like YouTube and, and Twitter and podcasts and all that kind of stuff. Use it to get a feel for what’s going on in the market. And we’re going to take a look at that in just one second. because the market is in a really big box right now.

Specifically the s and p 500 use all of that information as raw material to eventually come up with your own ideas. That’s a big thing that we do in our community. I want you to understand that my main mission is for you to make the decision so that you have the conviction to hold that trade longer, to maybe even add to that position, but you need to know what you’re looking for.

So again, big quote that we use all the time in our community. When you know what you’re looking for, you’re never lost at that point, then it’s just a question of optimal entry and managing profitable trades and kicking out the ones that. Don’t make money. Right. We’re actually going to give you one of the ideas that we’re looking at this week, uh, heading into this week.

A popular stock that’s kind of been going sideways, right near our breakout level. Okay? So what I want to get across here is if we start to see a lot more of these types of headlines, Is the bull market over? Should investors be scared? Five reasons investors should be scared. That kind of sounds a lot like how we came into 2023 and we’ve had some stocks that have gone up a hundred percent this year and a lot of people complaining they missed it because of watching Talking Heads, because of listening to podcasts, because of watching YouTube and having these click bait type thumbnails or people like flames in the background and you should be scared.

But meanwhile we keep going up. What’s more important? Predicting about where things might go, or just simply paying attention with the information you have right now and making a decision. Stop predicting, stop letting somebody else tell you what to do. And I know that’s a little ironic with us talking about this on YouTube right now, but we do things a little different.

We build arguments for ideas and what’s likely to happen next. They’re going to be losing trades. Anybody who tells you there’s not going to be losing trades, quite frankly, they’re full of beans. Everybody, every system has losing trades. That’s not the problem. The problem for a lot of traders is you’re trading the wrong stocks.

You’re probably holding onto losers too long because you just can’t admit that the trade’s not working anymore. And then really elevating your game is getting to the other side with stocks that you found, stocks that you like, stocks that you built the argument for. Understanding how to hold onto those trades longer and when to hold onto those trades with a little bit more share size.

We call that a profit maximizer. So what’s the point of all this, right? Why did I start out with sector rotation? Why did I start out with building that list? Why did I start out with those two headlines, Baron’s and the Wall Street Journal? Two unbelievable, uh, publications, right? But the headlines are a little bit more geared towards here’s, here’s a little bit of fear to get you to click.

Don’t pay attention to that. Pay attention to price action. Have a line in the sand. It could be a moving average. It could be Mac D, it could be at last yesterday’s close. It could be last week’s high. Whatever it happens to be. Use the same one all the time and know if it’s moving closer to or further away from that and make your decisions from there.

You want to take that a little bit further and do what we do, which is called order flow stacking, watching those smart money trades go back and forth. How long has that been going on? So if we take you a little bit into, we got to give you a little bit of sneak peek. We’ll actually go a little bit further into the newsletter today and we’re going to work our way down into industry groups.

Let me actually, make this a little bit bigger. So we’re kind of working our way now into a group of stocks that have really not been in play for a while. You can actually see here X P E V. But there’s a couple of other ones that are kind of in play right now as well. Now, are we predicting what’s going on in these stocks?

No. We have the amount of information heading up to the decision, and then we have new decisions after that. As a matter of fact, you know what? Let me come back on the screen and, and just talk about that for a second. Everybody knows and talks about all that information, the chart patterns, the volume, the headline and all that kind of stuff.

The news going straight into that decision, and then you put the trade on. Nobody talks about the decisions we need to make after we put the trade on. I got news for you when you put the trade on. Trading is not set at and forget it. No. The same way as driving. You don’t get in a car and say, I’m just going to drive on the Long Island Expressway and do 60 because I feel like it.

And I did that yesterday. Yesterday’s crowd on the road is gone. It’s a different condition. You have all that information when you get into the trade, then you have new information. After the trade, so we’re talking about Tesla, we’re talking about CV n a, Carvana, we’re talking about CarMax, which is actually lit up a little bit recently as well.

But the ones that have me a little bit more excited right now, we’re going to talk, we’re actually going to start about Riven, is the Chinese electric vehicle stocks right now. I will tell you again, going back to, we talked about before, the favorite stocks that you like to trade. I love trading those stocks, especially X P E V X, Pang, and now it’s setting up as a new trade.

Now here’s the thing that I think makes us a little bit different. I am not predicting where it’s going. I can’t even tell you it’s guaranteed to go somewhere. However, when you really understand what a trading edge means, and this is what makes what we do differently, we admit that an edge means most of the time it’s going to follow through.

Which also means sometimes it’s not, and it’s the second part that everybody loses their mind over when a trade doesn’t work out. Our job is to stack the odds in our favor with the information that we have heading up to if we believe we found a trade at an optimal entry. Optimal entry simply means if I’m about to hit that buy button, how much of a profit is likely for the risk that I have to take at that moment, if we like it, we put the trade on.

If we get positive feedback, it moves in our favor. We have a certain amount, we want it to move in our favor before we look to add to that position. After we hit our initial profit target, then we have another set of rules that tells us here’s how to manage the winning trade. If it moves against us, we have rules for that as well.

All of that, the consistency with which you’re looking at the market and the consistency with which you’re looking at new trades and building that argument for choosing to accept risk. That’s real trading. You do not want to be the best chart reader and the planet. You don’t. You want to be somebody who puts ideas together.

And if they make sense, you’re willing to accept the risk. If it works out fantastic, we have a set of rules for that. If it doesn’t work out, that’s, that’s fine too. That’s a part of the trade. So as of right now, I like JP Morgan on that breakout. We’ll take a look at that chart again. Now we know earnings are coming up.

All of these electric vehicle stocks. Again, we’ll give you the whole list. Obviously Tesla at the top of that list, right? Three downgrades and this stock hasn’t been able to go back. It’s actually up again this morning. We have three 14 as the next level Riven. We’re getting a lot of questions right now about Riven.

Right. Well, let me ask you a question. Let’s go back to the definition of what we talked about before, and I want to be clear about this. I am not saying Riven is not bullish. That’s not what I’m saying, but this is one of the biggest mistakes that a lot of traders make. Remember what we just said before, if I’m about to buy that stock right now, and we use the term optimal entry, if I’m about to buy it, optimal entry means that the next likely move, we’ll bring us enough profit to justify the risk.

So if we take a look at Riven right now and we take a look at what the stock has just done over the last. Probably a week and a half, let’s say, from that close right there into where it is right now, 25 and change. The stock is up 90% in nine days. Coming off of some great headlines. So now let’s bring this back.

You want to elevate yourself from, I know all the chart patterns to, I understand how to trade. There’s a big difference between the two and you know that. So r, right now in the headlines, great news, it’s up 90% in less than two days. If you buy that stock today, what is the likely next move in what amount of time that would justify that?

Well, I’m going to ask you a question. If a stock goes up 90%, is it likely not possible? Is it likely to continue in that direction to accept risk? For me personally, I’m just going to tell you straight up right now, I want the stock to pause. I want it to reset so that the risk makes sense. And the next move is likely I have a different stock.

So ribbon right now for me is not a new entry. I need Riven to pause a little bit before this move. 90%. What I do like right now, X P E V, which has pushed up. So again, if you can visualize, that’s what Riven looks like right now. But X P E V is now actually paused. So what I’m looking for now is X P E V.

Now I have a little bit better risk profile. Neo, not necessarily. Neo is still kind of all over the place and Neo actually is still waiting to get out of this. So it’s a little bit of a laggard. And you could actually see li in a nice little flag here. So if you could think about this and something we talk about all the time, push and a pause.

If you are buying during a push, you are having a little bit more challenging time to reset that optimal entry. Remember, if you get scared or hesitate when you’re about to hit the buy button, it’s only two reasons. Number one is you don’t believe that you have an edge, and number two is if you do have an edge, you don’t believe you’re following.

So let’s go to the next PA part of that. If you believe in those first two things, the only other thing you need to learn is optimal entry. Optimal ENT entry is, if I’m about to hit by, does the likely reward for the next move? Whatever that move is, you got to know if you’re day trading, swing trading, earning season trading, or if you’re an investor, is the next move, likely and worth the risk at this moment.

Very big part of trading. All right, so let’s continue to move forward with, with other ideas. Uh, something actually super interesting, obviously you want to be aware of some of these other stocks in the electric vehicle charging area, and obviously that’s a big part of Tesla right now as well. E N V X. Uh, I don’t know if John Bates is with us this morning, but John Bates has been all over this stock.

He started watching it when it broke. This over here, finally took off pretty good. Move 25% move next level’s up at 25, so you want to write down the list. So anytime you find. A sector or industry group, you want to know the sector and you want to know anything tangential to that sector. So obviously electric cars, electric vehicle cars are spiking a little bit right now.

Well, who powers those? Electric vehicle? Who, what kind of materials go into those electric? Who makes the batteries? Who fixes them? Who’s got the charging stations? Here’s a little bit of a list. Other areas that we’re looking at right now, insurance stocks quite a bit. So quite a few of these you can actually see here in, oh, actually there’s this, there’s a preview of the swing trade we’re looking at this week.

Again, resetting and looking for the optimal entry. You can actually see here the risk in Prudential, excuse me. Let’s actually pull that up a little bit for you. So Prudential started to rally pause, has room to go. So now we have a whole other industry list of stocks that I am watching for this quarter.

So we’re actually starting to see money kind of shifting away from these guys right now. So does this mean that in Nvidia, which is stuck now in the middle of a four week trading range, is no longer a buying opportunity? Well, let’s qualify what it means to be a buying opportunity. A buying opportunity means that there’s likely profit, potential, and new levels.

Nvidia right now is stuck very similar to what we’re seeing in the s and p 500. In a four week trading range. For me personally, that’s the right price. So Nvidia, the s and p 500, that’s the right price. And by the way, if you didn’t see what the s and p 500 did Friday afternoon, holy mackerel, man, look at the way that thing sold off.

That generally doesn’t happen in a bull market. Normally, they will hang it out near the high of the day. And kind of hold that bid. That’s, that’s a little bit interesting to pay attention to. So let’s continue to work our way through some of the ideas. And we’re actually going to go right up to the top of the list.

We’re going to go into sector rotation. So consumer cyclical, obviously on fire. Tesla carrying that entire group we talked about. Riven as well, right? Elon Musk is having a fantastic year. If you haven’t read this stuff about SpaceX as well, man. He’s on fire right now. Obviously, meta and Threads. The only thing I think that last I read meta was 70 million subscribers coming over from Instagram already.

Unbelievable. So we just talked about ribbon. I like ribbon is a long, I don’t like ribbon until it starts to pull back. So if we go back to ribbon and set up the next trade, what are we looking for? We’re looking for a pause in Riven somewhere above 21, looking for it to reset to make the next move up here towards 31.

So we’re essentially looking for 21 to 31 to be the next move. It’s fantastic that it rallied. Um, it’s too far from an optimal entry for me at this moment. All right, so let’s continue to move. Sticking with, I spelled that wrong sticking with the automobile. Oh my gosh. C V N A. Now, here’s an interesting thing as well.

A lot of people trade lower priced stocks with extra share size, just simply because they’re lower priced. Well, I got news for you. This stock is bouncing back and forth in $5 trading ranges. This is a stock that we’ve been watching quite a bit over the last, I want to say, we kind of mapped it out in a box over here just to give everybody an idea, you know, again, kind of sticking with the theme of if it’s the right price, don’t get chopped up.

We actually had this as a breakout originally at 12 and change, and then we got some more confirmation when it broke over 13. This was a really nice move and now it broke out again. But look at the size of this candle. That’s a $6 candle on a $26 stock, maybe a $5, a $5 candle. What does that mean? Right.

Okay, great. That’s fancy talk, right? What does that mean? Well, a lot of people jump into lower priced stocks with size just because they can afford to and don’t pay attention to the volatility of those stocks and what is the right share size. Even though c v NNA is now a $29 and 51 cents stock and you could probably in get in there and get a few thousand shares, you want to work your way into this trade so you don’t get shaken out of a good position.

Volatility is picking up. We saw that a little bit last week in the vix. So what does that mean for trading? Well, as volatility starts to come off the lows and starts to go up, it actually went up all the way up to over 17. As volatility increases both in the big picture of the market, which we’ll see in the VIX and in your individual stocks.

Again, let’s go back to CB n a and take a look at the average true range here. Pretty small, but now look at the size of these moves. When you learn to recognize the volatility and track it in the individual stock that you’re trading, you will know that as volatility expands the distance between your stop loss and your entry is going to expand, which means that you need lower share size to compensate for that volatility.

So how do you find that? Well, if you go over to, let’s use VIS as an example. And you type it in, in the lower corner. Over here you’ll see average true range and beta. So it’s got a fantastic beta. It moves with the market average true range of three. So that means on any given day right now with the current volatility that C V Nna is trading with is over three.

A month and a half ago, it wasn’t even two. So you see how you have to adjust as the volatility of your stock moves higher and lower your position sizing, especially your initial position sizing, working your way into those trades. I like CCB n a right now, but the odds are, it’s, it’s bouncing back and forth.

That means that we have to work our way into that trade because of that wider swings, which we’re seeing on the charts in order to hold the good trade without getting shi shaken out of, you can actually see the size right there. Right? All right, so kind of moving our way down, again, this is the lesson here.

I’ll post that into the, into the description below other stocks to watch in this particular sector. Hilton, Marriott, Amazon, Draftking, a o, right. Two big ones here, Hilton and Marriott. Right on the cusp of breakouts. As we are also seeing with a lot of the travel related stuff, we’re kind of working our way into R C L, which is not pulled back.

Delta Airline has earnings this week. Some pretty interesting moves where everybody’s kind of getting out of the house now and bookings for a lot of these things are really strong. However, you want to be a good trader. You have to really pay attention to what’s going on in other areas of the market. As long as energy prices remain lower, we can confidently hang onto, if not add to some of these travel related stocks.

If energy and specifically crude oil starts to rally a little bit, You are going to start to see pressure on their net margins that are going to come down, which is why we got to pay attention for the back half of this year, is paying attention to guidance when we start to see earnings coming out this week.

Okay, so let’s continue to work our way through obviously R C L, Royal Caribbean still holding the bid. If you didn’t happen to see Delta Airlines, my word, that thing has just been amazing. Again, you know what’s something else I want to talk about here as well, which I want to, again, it’s, it’s the start of the new quarter and I really want you to be prepared.

Are you mostly focused on stocks that are in the headlines every day? Or are you focused on stocks that are going up every day? They’re not always the same airlines. Cruise lines, slow grinding moves. You want to know the, the strongest sector that you, uh, actually industry group that you probably have not been paying attention to.

If you’re not doing the work every day, like I’m showing you right now. Residential construction. Raise your hand if you’re reading all of the headlines about housing prices and interest rates and the real estate market’s. Not good. Well, have you been paying attention to some of these stocks that have basically been in bull markets for about eight months now?

This is the difference between doing your own work and reading headlines for ideas, reading scans for ideas. You got to do your own work. So let’s break that down even a little bit further. And you got to know what’s going on over the last four weeks, from one week to the next. Last week was kind of a holiday week, that kind of thing.

So now we’re looking to come out of this pause looking for some more of these kinds of moves, right? So let’s continue to look for some of the ideas that we’re working our way. Basic material, and this is actually a very important, uh, quote for lack of a better way of putting it. They are less bearish, but not yet bullish, and you can actually see what we’re looking at here.

Now, one of the biggest things here to pay attention to is a few of the stocks, if not a pretty big list of stocks in this group are starting to break long-term, bearish order flow, consolidate, and then show us some bigger volume on the breakouts. Now this is what I’m talking about when I say do that extra 15 minutes worth of work.

You do that extra 15 minutes of work, you start to notice these things before they hit the headlines four weeks from now. Basic material stocks are starting to bottom out when sideways and now starting to break out. There’s a pretty big list of those stocks that meet that criteria. These are where you start to go in with initial reversal, initial position size.

You start to put your first piece on. If it doesn’t follow through, you had your first piece on because it was the first time it was reversing. However, if these whole sector is starting to reverse, which the more stocks you see, the greater the likelihood of that happening. You now have the best entry in the world, and now you’re just looking for a spot to add to it.

So if you could take a look at Mosaic here. This list of stocks. If you want to take a snapshot of that and take a look at ’em. Actually, CF is one that we’ve been watching for a while as well. You can actually see CF broke, uh, two trends. It broke this longer term trend, and it broke this shorter term trend than you can see on the spikes higher.

It’s actually showing much, much bigger volume. So again, initial reversal, not full share size, initial reversal. And again, doesn’t need to be a thousand dollars stock. It needs to be a stock that’s obvious. All right, so continuing to work our way through technology. We can’t give up on technology, right?

Pause, but a few produce. Solid week of momentum, right? So here’s the list of stocks, uh, with momentum. You want to take this list right here? Start to keep an eye on those. Here’s the big move that we’re looking at for a two-step trade in D O C N. If you didn’t happen to see what D O C N did last week, we’re waiting for it to reset.

But Thursday and Friday, just absolutely amazing, accompanied by amplified volume, waiting for this stock to reset somewhere around 47. Little bit of resistance at 50. Then we’re looking for a move up towards, uh, maybe even a little bit higher than 60, probably up towards this 63. So now if you didn’t catch what I just said, this is very important.

D O C N rocketed higher on Thursday and Friday. Right. Awesome. Hit all the scans you probably have. Right? But it’s too far from the optimal entry. We also have resistance at 47, which is the last level, and we have some resistance at 50. So that’s setting up as a two-step trade for me because the next level after 50 is 63.

So D O C N is a two-step trade where I’m looking for the first piece to pause around 47. Looking for it to pause, then above 50 for the second piece, and then look for a run towards 63. So you got to notice these things. So optimal entry is a part of it. Then where is the next level that we need to get through?

So because we’re setting up for a new optimal entry somewhere near 57, we’re looking for it to pause near 57, reset that optimal entry so that we have a risk that we like. Then first piece, looking to add over 50, looking for a run to 63. Now, think about how less stressful trading is when you actually have the entire trade mapped out before you even put the trade on.

That’s where you want to get to. It removes and sucks all that negative energy out of the air. All right. Oh, by the way, before I forget, if you haven’t done so already, we have make sure you hop over to our new website and join the forums. If you go over to top trading pros.com and you click over here on the forums, click in here and start posting.

You have some questions; we’ll have some conversations. In there we have forums for, stocks, options, Forex and Crypto. So if you trade any of those, hop on over. Membership is free. You just got to get into the group and let’s have some conversations. Top trading pros.com. The link for that is actually in the description.

All right, so let’s actually continue to hop on through what we’re looking at. So obviously we gave a bunch of stocks in tech. Can’t ignore tech. The one thing we are looking at in tech, obviously, uh, Nvidia, which kind of led that ai boom higher, we just talked about it. It’s basically stuck in a $40 trading range right now, $40 now.

Why, right? Well, it, this move right here, it was probably one of the strongest stocks for the entire first half of the year. Other than SM c I, which kind of looks exactly the same right now, another big wide trading range finally broke this three week move to the downside, which broke this bigger move.

But we need to get over 2 75. You can see we’re actually not quite there yet. Now one of the things we did point out today in, uh, SM C I, and this is kind of like something that is a. Really important thing to pay attention to. Got above two 60 and failed. Got above two 60 and failed. Got above two 60 and failed.

That’s called price discovery and we kind of wrote about that a little bit this morning in um, S M C I. So right now price is trying to figure out, Are there more buyers than sellers above two 60? It’s above that level right now. If it stays above that level, then we’re going to look for another move through this two 70 level.

So remember, price discovery, s m c i two 60 is the big level, right? It’s, it’s above that right now. Let’s see if it stays there. All right, so working our way down. We talked about DocuSign, we talked about industry groups, so we kind of covered everything right now. So I want to recap what I said to you before.

You’re starting to see a little bit of bearish headlines coming out just ahead of the new earnings season, starting financial stocks coming out at the end of this week. Personally, I like JP Morgan’s got roughly $25 to go, oh, actually I forgot the trade. Uh, DraftKings. I want to walk you through two different, um, ideas that we had in DraftKings.

Let me move you down so you can actually see here on June 28th. Was the initial trade in DraftKings. Got up to the breakout pullback, got up to the breakouts, 26 50 entry on the initial position. Again, talking about, we’re showing about right. Talking about and then showing the trade and what that means for initial risk.

Very specific to say initial risk, because each type of trade has different risk. So you can actually see here in Draftking and we’ll kind of work our way out here. There’s really not a lot of resistance right now and the 26, 50 level. So we’re still kind of hovering right around the original entry that we showed here.

Okay, so here’s the original trade. $2 and 50 cents on a initial risk, which did not get stopped out there, and now we’re actually mapping out the second part of the trade and what the stock needs to do. We’re looking forward to get up to that $29 level. If it does, then we’re going to move up the trailing stop-loss, we’ll have more shares, and then we’ll switch over into, uh, trailing stop mode if it finally gets up to 29.

But we’re not doing anything. Until it gets up to 29. Cause it’s still kind of dancing back and forth in that area. Okay, so if you want to watch this video again. Take a bunch of notes. I’d really like to get your follow up questions. If you have anything, post ’em in the comments, but more importantly, click through to the website.

The link is on the bottom there. There’s no cost for it. Just sign up for the website, get into the forums, stocks, options, cryptos and Forex. I’d love to have some follow up conversations on that as well. So remember, Don’t pay attention to the headlines. Don’t let them scare you. Read the order flow, read the tape, look for optimal entries, and then learn how to use the right trailing stop.

That is what will separate you from everybody who wants to be a better chart reader. When you’re saying you don’t want to be a better chart reader, you know how to read the charts, but you want to elevate yourself to a trader, which means you’re taking into account probability. You’re taking into account the right initial position, size, how and when to add to that trade, and more importantly, understanding how to hold those good trades.

Longer. You want to be a trader, not a chart reader. Big difference. All right, if we provided some value today, please do me a favor, subscribe and hit that thumbs up. I’d really appreciate it. All right, have an awesome week everybody. I’ll speak to you soon.