Trading the Charts...and a few Charts
There are rules to trading the charts and this week one rule really stands out.
This service is for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice. These are my opinions and observations only. I am not a financial advisor.
Waffles, family, friends, and charts. This is what Sundays look like for me.
I consider myself very fortunate. I think about this often.
And I enjoy sharing what I know with you, every week, throughout the week. Thanks again for reading!
This week is no different from any other in the sense that the approach is always to trade the charts in front of you.
However, this week could be very different as global events take center stage.
I’m not going to dive into the details, that is not what this newsletter is about. I am sure you are getting your fill elsewhere.
What I will say is the charts might be set up perfectly as of Friday’s close, but none of that can be completely trusted given the news.
And that is basically the main lesson I think you will benefit from the most as we head into another trading week.
Trust the chart in front of you, but be mindful of news and world events that may drive much different trading than any chart might have suggested.
This is always true. Big news can disrupt any and all patterns.
Fundamentals go right out the window too, don’t let anyone tell you otherwise. When markets react, entire sectors and sometimes entire markets move in the same direction.
It is on the other side of that move where companies with strong fundamentals really shine, and the charts will also reflect it.
So with that, let’s take a look at a few charts and keep in mind that being patient on Monday makes the most sense.
Charts to Watch & Trades to Consider
I’m going to get to growth stocks, tech stocks, energy stocks, and even MARA which produces and mines digital assets like Bitcoin.
First up is AMD, the falling wedge has been broken to the upside and now all we need to see is some follow through.
It closed Friday above it’s 50-day simple moving average (SMA) and if it can hold $105 I like the potential for more upside targeting $111.82 next.
If you have been a long time subscriber, or if you follow me on X @tradernatehere you have undoubtedly heard me talk about DraftKings, DKNG.
Well here we go again with another push towards resistance but it is worth noting that this time DKNG has closed above its 50-day SMA.
A solid push through $30.32 with strong volume and we could see a run to $34.50. A rejection could find shares drifting back towards $26.41 to meet the 150-day SMA.
Another favorite earlier this year was MARA, but the recent selling has been relentless even with Bitcoin rallying.
The support at $7.11 held up nicely last week but it is still below the trendline and would need a big move through $8.50 to get some momentum going for more upside.
Even then, I would really want to see $8.87 broken through and tested. If that level can hold, I like the possibility of getting back in this trade.
I am still bullish on energy despite the recent selling and drop in the price of oil. However, I am definitely watching a little more closely.
A few names that could really pop from current levels are in my Savvy Trader portfolio, which you can follow here for free if interested.
Every transaction is documented, and you can check back on every trade I’ve made and every comment posted.
One of those names is Energy Transfer, ET, which retested support at $13.30 and bounced nicely last week.
This retest was right at the 50-day SMA and shares look ready to make another run towards $13.85. I would expect a little slow down to be likely near $13.60 as well.
Another name I like is nVent Electric, NVT. This company provides a variety of electrical needs including cables, connectors, and fasteners to a broad customer base.
NVT is has a team of 10,000+ across 100 sites around the world (per their website).
The chart shows the daily candles just had a massive bounce off of support and closed at $53.24 which is right at a volume shelf.
If shares reject here I will be watching for a quick regroup and attempt again to get above $53.25.
If shares power higher, the 50-day SMA is just above $54 and then $55.52 is the target.
I hope these charts are helpful and provide a little insight into how I think about trading.
Remember what I said at the beginning of this newsletter. News has the power to disrupt any and all chart patterns. Be patient to start the week and let the information come to you before you get too aggressive.
That’s my advice anyway. That and be kind to one another. You never know what someone else is dealing with or going through.
Thank you for reading and let me know if there is a stock you would like me to cover or any trading topics you want to learn more about.
Have a great week of trading ahead!
-Nate