The market was not strong last week and the major indexes seem to be sitting very close to support levels at the 20 moving average on the daily chart (see SPX, DIA, IWM, VIX), which also happens to be a previous sticky point for many of the indexes (except QQQ, but tech had a rough week last week). Market futures are up slightly as I type. It will be interesting to see how everything fares this week. If the markets hold support, then it could be back to business as usual. If not, we’ll have to reevalaute.
I’ve decided to intentionally avoid a biotech stock this week since the biotech ETFs (XBI and IBB) are both sitting below the 20 period daily moving average lines. This isn’t atypical for these ETFs but I need confirmation that the direction is changing after the large drop last week. It could set up to be a nice trade for next week.
The trade of the week is SEAS (SeaWorld Entertainment Inc). I really like how this stock has continued to move up (even in the red market last week) and held the 5 period daily moving average line (the green line in the lot below).
I’m going to look to buy at or slightly above this 5 SMA line, which looks like it will be ~$30.75. Note that this has a very nice habit of pulling back to this line so I expect to be able to get an entry there.
The Consumer Discretionary ETF is XLY and it is near 20 period moving average (Currently trading at $115.58) similar to the indexes. I may exit my trade early if this index doesn’t hold the $114 level. SEAS looks very strong but I don’t want to swim upstream.