Weekly Playbook | Nov 24, 2024

Focus Names

SQ

For breakout traders SQ was buyable last week as it cleared it’s multi-year resistance. The character of SQ has definitely changed. If you missed it, another entry will come, just be patient. These character changes are long-term trend changes, so no need to rush. Always about risk-reward. I am looking for 2 scenarios here in SQ.

Scenario 1: Either it will continue higher, grind sideways briefly and respect the 10-week MA for the first time. In this scenarios we can use the 10-week respect to enter with low risk. This would be how we can find an entry on continued strength.

Scenario 2: The 2nd scenario is if this breakout ‘fails’ and pulls back in below it’s breakout area, it will likely hold the trend line below which would confirm another higher low. This will be another low risk entry and one that is easier to buy with more size.

TSLA

First to understand why TSLA is on focus, below is a monthly chart. TSLA is a big liquid leader, you can see it builds long bases, and then has massive uptrends. I own some already, and if it makes it out of this latest multi-year consolidation, it could make for a great 2025 hold.

Below is the weekly TSLA chart with 2 possible scenarios.

Scenario 1: It will continue higher, or have a few tight weeks, and respect the 10-week MA for the first time. In this scenario we can use the 10-week respect to enter with low risk.

Scenario 2: The 2nd scenario is if it doesn’t show 10-week respect (which is entirely possible we are technically still in the base) then we would want a higher low to be confirmed around the current trend line it has going for it.

RBLX

This stock broke above its multi-year resistance level. Over the past two weeks, it pulled back in a controlled way. It now seems to have support at the old resistance.

If this support holds, it’s a bullish sign. This setup offers a low-risk entry. I am currently long RBLX.

Character Changes

NUTX

The stock jumped on massive volume, breaking above the 30-week MA for the first time since its downtrend. It has also respected the 10-week MA.

This might be its first higher low, though it’s mostly moved sideways. However, it’s now extended above the 10-week, so there’s no action to take yet. It could push higher, but I’ll wait for weakness. If it nears the 10-week MA again, I’ll reassess for an entry.

PTON

I’ve been vocal about PTON since I first noticed the big push up on volume that was followed by a few very tight weeks of price action which allowed the 10-week MA to catch up, which it respected. I am long.

There is no buy right here as it is extended and 46% above the 10-week, but if this is the real beginning of what appears to be a long-term uptrend, you will want to get involved when it lets you. Keep an eye on it if it consolidates and respects the 10-week again.

ZM

This looks almost identical to PTON. It is in the Software & Services industry group which is ranked 2/25 this month, so it has a strong group at its back which helps stack more odds in it’s favor. The recent tight sideways action after the big volume pop was a great entry area as it made contact and showed it’s first respect with the 10-week MA.

It is reporting earnings Monday AMC, so we will see how it reacts. If it keeps pushing higher, we need to wait for a similar sideways few weeks that allow the 10-week to catch up again. Or if we see general weakness and it puts in a confirmed higher low since this new uptrend.

U

This is an earlier CC. It is in the Software & Services industry group which is ranked 2/25 this month, so it has a strong group at its back which helps stack more odds in it’s favor.

We have big volume spikes coming in clusters, our first higher low (which was buyable) and another big volume push off the higher low, with strong price action to match. This will likely be a choppy mover as it works off lows here.

For it to become actionable we want to either see it start to show respect to the 10-week MA if it grinds higher, or if in a few weeks if it makes contact on weakness with the trend line here confirming another higher low.

BILL

This is an early potential CC. It is very wide and loose. Looking at this ones personality, we have to expect it will likely pull back in pretty hard eventually. If that happens, we look for the first higher low to tell us that this is a new uptrend instead of just a bounce off lows in a downtrend.

Volume Watch

High volume creates new long-term trends. However, volume can appear anywhere. If risk isn’t manageable, the best approach is to wait and watch until price action tightens up.

One trade, ONON, stayed on Volume Watch for 4 months. It didn’t offer a good risk-reward entry during that time. The names below are for tracking only. Watch them for future entry points.

FRSH

ROOT

LMND

LUNR

GRAB

ELF

DIS