5 Key Money Making Setups
Building a Watchlist
Let’s use strength relative to the S&P 500 (SPY) as a tool to build a Watchlist. Notice how the SPY is still below the 21 EMA (sky blue line). Strong stocks that were able to break above the 21 EMA will be our focus.
Facebook (META) is showing significant relative strength as it is above all important moving averages and broke past the downtrend line. It is also in a “Squeeze”, hinting that a large move is coming. With the indicators geared bullish, odds are in favor of that move to be to the upside.
Microsoft (MSFT) shows relative strength as it was able to get above the 21 EMA and all of the other EMAs we track. The downtrend line is the last dynamic resistance barrier we see. The cycle brackets shows MSFT following roughly a 40-day cycle in 2023. Based on this, we expect MSFT to find the energy to break past the downtrend line around 10/17, especially given that all of the indicators in the chart below are showing strength.
Google (GOOGL) is above all EMAs and didn’t really correct much over the past market pullback. It bounced off its uptrend line and seems poised for a strong 4Q. A pullback around 10/17 may be a good entry opportunity, based on the cycle bracket.
Nvidia (NVDA) is above all moving averages and the uptrend line. The Money Flow Index displays significant buying. Upward movement, interrupted by a quick pullback around 10/25 is probable, given the amount of buyers, who could be mutual funds wanting to window-dress their portfolios by year-end.
Tesla (TSLA) is above all moving averages and the uptrend line. TSLA appears to be past it’s cycle bracket low point and should be starting a new uptrend now. The Money Flow Index does not show confident buying yet, so the uptrend may still be early.
Bonus:
The Semiconductor ETF (SMH) is also above all EMAs and above the trendline. The indicators are all looking bullish, but the downward cycle ends on 10/25 according to cycle bracket. This is also an investment that could have a strong 4Q.
We will update the setups in this Watchlist as and when new opportunities present or if the current setup goes void. Let us know in the comments below if you would like us to have specific entry, take profit and stop-loss levels to make the process more effective. Thanks for reading Cycles Edge!
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