Leaders Decoupling
What TSF Is
A swing-trading resource that saves you time — analyzing the market and surfacing interesting opportunities and setups.
Trading education to help you build your own methodology, process, and risk-management & execution framework around sound principles.
A community with 400+ members, with a private Discord.
The TSF Analytics platform — thesetupfactory.com
What TSF Is Not
A trade-alert service. I share all of my own trades, but those are my personal trades and journaled thoughts — never a recommendation to buy or sell anything, nor is it financial advice.
Signals to act on. The setups aren’t recommendations either. Every setup has to trigger to become valid; I only share my own views on the setups and the stocks I discuss.
Nothing contained herein should be construed as investment advice, a recommendation, solicitation, or offer to buy or sell any securities, financial instruments, or assets. For educational and informational purposes only.
We Continue To See A Market Digesting It’s Recent Move
We see a pretty strange composition of things working at the same time; energy, commodities, genomics, medtech, software and tech just to name a few sectors.
Clear strength under the hood and very encouraging price action among recent earnings gappers in the right themes.
It’s Hard To Be Bearish When Small Caps Look Like This
The market is coiling tight and preparing for a bigger move either way soon. A little shakeout seem to be in the cards and wouldn’t hurt to build some more setups.
But when the major indices are above all key moving averages, I pay very little attention to what the indices are doing — I focus on the price action in stocks.
And So Far Stocks Are Behaving Very Well — FSLY
The most interesting move so far this week in our focus list was FSLY.
I don’t think it was on many peoples radar, but it was setting up in a quality setup into this week.
Huge move after a quick test down that was bought up before the HVE AVWAP. Lets see if it can build from here.
And It Is Important To Understand That Earnings Season Is The Most Important Time Of The Year
Because we get so much information, not only are leaders born during earnings season, we learn so much about the risk appetite and what sectors are being rewarded.
And there is no doubt that this has been the software season. Just look at RNG and ZETA.
ZETA
Strong stuff, lets see if the software outperformance can continue from here. Far from every earnings gapper behave like this, but those who do is usually worth keeping track of, because they like to continue to trend strongly if the environment remains constructive.
Lets Start With Going Through Some Key Stocks First
MU
I still own MU in my weekly trading portfolio, since it continues to respect the weekly EMA 21 for now.
And I already gave you my thoughts about the memory trade in the market analysis, I think everyone are expecting a breakdown, so it’s interesting to be prepared for the opposite just in case.
Still very early and below the 50, but I am watching.
Tightening nicely and might be the first higher low, sitting just above key support.
And I generally never buy stocks below the 50 SMA, it is usually a headache, the easy money comes above the 50 SMA most often.
Having said that, sentiment is starting to be skewed bearish memory, which is interesting, first step is simply reclaiming EMA 21 and I am watching how it behaves in this key spot.
And I often talk about structure pressuring price to choose direction, and that is what is happening here, I expect a bigger move up or down occurring very soon.
SKHY
All memory stocks look very similar, but SKHY is also interesting.
And one thing that I like with AVWAPs is that they just shows you demand in a superior way.
An AVWAP anchored at swing low, trending higher and price bouncing cleanly above it producing higher lows is a stock where dips have a high probability of being bought and buyers are in control.
We don’t have that here, but we might be at the start of it. A strong move higher from here might change the price action in the memory stocks.
Early but key spot.
How Many Times Should A Stock Test The 50 SMA — DELL
A stock retraces to a key SMA like the 50 to gather enough demand after it’s recent push higher, to continue trending higher.
Which means a stock should test the 50 SMA, and that demand that arrives there should be enough fuel for a stock to blast higher.
And it is normal for a stock to test the 50 SMA 2 times, sometimes 3 after a strong run before resuming it’s run.
Anything more is suspicious, and here we also have a situation where structure is pressuring price to choose direction. DELL has no place to go and things should clear up soon.
Very strong zone of support here with both the AVWAP and a potential launchpad forming, it has no excuse to not go from here, so I am watching closely for the rest of the week.
Maybe it has exhausted people enough so it might work? I don’t know but a move is coming soon and unless it starts to show some strength it is clearly suspicious.
Lastly The Semis — INTC
We looked at MRVL on Sunday, lets look at INTC today.
We continue to see small cap semis outperform the large caps by the way, it is usually a bullish clue for the semis, but price must confirm.
Early and deep under the 50 SMA, but the nice thing with INTC is that we have the 100 dollar century mark which also coincides with key downtrend resistance.
A move is likely coming soon, lets see.
Now Stocks
I want to highlight that many of this weeks focus stocks still look incredibly good and can become actionable, I am monitoring them closely.
But lets add some more stocks to the list because some high quality setups have been building.