Investor Spotlight

Market Outlook Week of Oct 23 to Oct 27

I still have a bullish outlook for the market. Retail traders and investors should be 100% invested in the stock market by now. Currently we have only 4 "distribution days" between the two major indexes of $NASDAQ and $SPY. Market has been in a "Confirmed Uptrend" and the condition of the market is healthy. On the 30th anniversary of the market crash of 1987 on Thursday Oct 19th, there was some heavy selling but the institutions kept all the 3 indexes - $SPY, $NASDAQ and $DJI above the 8 day ema(exponential moving average). The following day on Friday, the institutions came in as buyers and all the 3 indexes finished above the 8 day ema. My upper range target for the $DJI that I posted last week was 23,300 and we managed to finish the week at 23,328.60.

$SPY and $DJI have been trending along the 8 day ema for the last 6 weeks. We have not had any major retracements down to the 34 day ema for the last 6 weeks. This week we are having some names in the Transport Sector, $AAL, $ALK, $SAVE, $LUV, $ALK, $UPS, $UNP and the Defense Sector, $BA,$GD,$NOC,LMT as well as the depressed Energy Sector, $HAL,$COP,$XOM and $CVX reporting earnings. Some of these stocks are hovering along their all time highs. Earnings reports can drive these names up or down and that can affect the overall condition of the market. Below is my projected upper and lower range target for the 3 major indexes this week. Once again, this is not a forecast. It is best to monitor the market daily and make appropriate adjustments on the stocks with a trailing stop to mitigate the loses but also to capture the profits should the market exhibit "distribution days".

$SPY ... 252 - 261
$QQQ ... 146 - 151
$DJI ... 22,600 - 23,700

Harvest Profits

Some of the followers on Twitter and Linkdin that I have been talking to for the past two weeks, are euphoric because we didn't suffer a market crash or any significant pull back in the market. Most Growth Stocks tend to consolidate once they gain +20% to +25%. One of the disciplined thing to do when the stocks make such gains is to close down part of the position to lock in profits. This is the time to raise some cash if you are 100% invested in the market like I am right now. Most of the Growth Stocks that meet my criteria this weekend have already made some good profits right now. This is the week to close down the laggards that are not quite performing like the winning stocks. It is also the time to harvest partial profits from stocks that have made +20% or more. It is a good idea to leave perhaps 20% to 30% of the winning stocks if these stocks have earnings being reported this week.

My Winning Stocks

Here are the results of some of my winning stocks that I started highlighting in my weekly posts since Sept 17th. I have targeted these stocks to close out partial positions this week. They have attained my Profit target that I outlined in my Trade Plans. I shall retain a small position in each and use trailing stops to mitigate losses, should the market retrace a bit this week. I have indicated in parenthesis the date the trade was placed and the price that it was filled at. For those of you that are following my trades for learning purposes, I encourage you to reach out to me if you have any questions on these trades.

$VMW ... (8/18 $ 95.75) +23.59%
$IPGP ...(8/31 $170.39) +18.90%
$YY ... (9/5 $ 74.50) +25.00 %
$LRCX ... (9/25 $171.00) +20.00%

Stocks To Monitor This Week

$LGIH
$NVR
$NOW
$DVMT
$CRM
$SHW
$IONS
$TXN

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