Buy Or Pass?

Hey 5-Star Trader,

What a busy week for the market! The Federal Open Market Committee (FOMC) met, and a whole slew of earnings reports were released. All this action has created a frenetic market environment, so for the remainder of the week I’m revisiting my watchlist to see who is still a good buy.

What Tickers Are On My Watchlist?

When building my watchlist, I like to include tickers from different industries. This week, my top three sectors include tech, staples, and housing/discretionary.

Tech Sector: Microsoft (MSFT)

I believe the “spooking” going on in the market will deliver some decent tech buying opportunities, especially since these kinds of moves have been pretty rare. I started picking up more MSFT a few days ago during the after-hours session at $275 and will probably add more. I am a huge fan of MSFT and have been for a long time. I buy more shares of this stock every time it falls to the 50 simple moving average (SMA) on the daily chart. This time, I got the rare chance (one that has not occurred since the Covid-19 crash) to buy it at the 200 SMA — a major discount! 

Levels: I really need to see MSFT hold $275 because if it can’t, $250 is the next buy zone. I am buying at $275 and would buy at $300 as well, but don’t be surprised when it hits resistance at $320. It will probably take a while to get the previous momentum back and will probably chop around. My target is $325, but I would definitely not sell it when it hits. This is a long-term hold for me. 

Disclosure: Most definitely long MSFT!

Staples Sector: Costco (COST)

Most staples stocks are up on their highs, and trying to rotate into safety at this point is a move made way too late. However, that is not the case with Costco. This week Costco was down 16% from highs, sitting nicely on support on the weekly chart at the 34 exponential moving average (EMA) and is nearing the 200 SMA on the daily chart. Yes, the short-term daily chart trend has shifted, but the weekly trend remains intact. COST has seen rising earnings per share (EPS) the past three quarters. A solid feat, especially in light of inflation.

Levels: I like the current price for a buy and wouldn’t mind buying up to around $500. My initial target is $530-$540, which is where I have resistance.

Disclosure: Long COST & buying more

Housing/Discretionary Sector: Lowes (LOW)

Housing stocks have gotten hit with news of rising mortgage rates, as rates on a 30-year mortgage have already increased about a point which is a pretty substantial difference. Homebuilders like D R Horton (DHI), PulteGroup (PHM), and KB Home (KBH) have had a bit of a rough month, along with Lowes (LOW) and Home Depot (HD). However, millennials are getting married and in need of those houses in the suburbs. If they can’t buy a nice one (which, let’s get real, I don’t know any millennials who buy new houses) they are going to buy older ones and do their own remodels with stuff they buy. LOW is slightly stronger than HD, but I own both and like both here. 

Levels: Buyers beware of resistance at $250.

Disclosure: Long both HD and LOW & buying more

-Danielle =)

Want a freebie? Join me on February 2nd, for a free webinar. There I show you how I’m able to anticipate trend shifts through choppy market conditions!

Up Next...

Waiting on a Dip Buy in Microsoft (MSFT)

Hey traders! The Nasdaq is pulling back today, which, in my opinion, is a much-needed move. With the extended market, buying anything with an edge was nearly impossible. So, while pullback days aren’t as much fun as when the market is roaring (unless you’re short), I use them to identify opportunities. In this case, I’m … Read more

Read More

When a Ticker Makes Targets

Hey Traders! On Monday, I sent you a video about my short-term setup in Tesla, along with my $250 price target. You can check it out in the Tweet below… Since then, the squeezes I noted fired to the long side, and Tesla traded directly to my Fibonacci price target at the 1.272% extension level. … Read more

Read More

A Trade Setup in TSLA

Good morning, traders! The Nasdaq futures are choppy at 16,000 after making quite the run. So, what’s next? Looking for the next round of setups, of course! When tickers and indexes get sticky, squeezes will start to consolidate. Those squeezes generally occur on the lower time frames first. When those squeezes fire, they can either … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now
all-as-seen-on-logos