6/18, 10 Strong Chart Setups For The Week Ahead

The overall market has run hot, as you can see below we are sitting with an RSI at overbought levels. We are quite extended from the 8 ema around 435 and even more from the October lows trendline(the white line around 420). If I was a betting man, with opex having just passed, I would be say we should have a small period of weakness, say a couple weeks, followed by an earnings run up in early July. So fear not, as long as we remain above that trendline from October, the trend is still up. I still do not like that gap right below 425 from 12 sessions ago, and would prefer it fills sooner than later.

This is the weekly look below, you can see the weekly is also about to hit an overbought RSI and a pullback to the trendline(white) is perfectly normal. As you can see we’re also breaking out over all the key moving averages on large timeframes, it is really hard for me to be bearish no matter how bad the economic data is. The price is the truth. If/when we break that long trendline, then we will get bearish in here.

This week in addition to the charts, someone asked me the other day to include options flows for the names I post so I will add those in as well to give more context. Now remember, just because it’s a strong setup doesn’t mean run out and buy these equities. Use the charts to guide you with levels to sell puts at to enter lower. Never, ever just go buy any stock, let it come to your price. The main thing to get from this is use scanners to try and look for longer term candles weekly/monthly that show buying. If the buying lines up with some unusual flows that I post or a name is over a key moving average, that’s just another small bit of confirmation on the potential direction we seek to find.

1. BA - I had this one on the list last week and the only reason I’m including it a second time is because this setup is still very powerful and as you can see below, there was a huge lot of 5000 calls bought almost 5% higher at 230 expiring this Friday, so keep an eye here again this week.