Home » Watchlist Update: Market Rally Hits a Roadblock

Watchlist Update: Market Rally Hits a Roadblock

Stocks went nowhere last week.

After a huge move the week before, the indexes stalled. 

As expected, the S&P found resistance at its 200-day moving average.

Daily Chart of SPDR S&P 500 ETF Trust (SPY) with 200-Day Moving Average – Source: TradingView

I also don’t expect to see much movement this coming week.

US markets are closed all day on Thursday for the Thanksgiving holiday, and they will close early at 1 p.m. ET on Friday. 

Volume is usually relatively low surrounding the Thanksgiving holiday. 

Unless Putin fires missiles or Biden does something crazy, it will likely be a short, quiet week in the market.

The Big Picture

Looking at the big picture, I am still not convinced the market has bottomed.

The Federal Reserve is expected to raise interest rates another 50 basis points (0.5%) at its next meeting.

That is only slightly better than the previously unprecedented 75-basis-point hikes we’ve seen lately. 

The Fed also remains committed to aggressively unloading its $8 trillion balance sheet on the market, which will be a huge headwind for investors.

Personally, this is what I expect to see…

Weekly Chart of SPDR S&P 500 ETF Trust (SPY) with Price Projection – Source: TradingView

We will see how things play out, but I believe we could see another 15%-20% leg down in the index before reaching a bottom.

There are still some stocks showing strength, though, with some sectors outperforming the rest. 

Here are three names I have on this week’s Watchlist for potential buys…

Flex Ltd. (Long Idea)

Flex Ltd. (FLEX) is setting up in a pretty textbook breakout pattern.

Daily Chart of Flex Ltd. (FLEX) – Source: TradingView

Shallowing retracements, good pockets of buying volume and low-volume retracements all point to higher prices if the market holds up.

Watch for a breakout above the $20 level.

Denbury Inc. (Long Idea)

Denbury Inc. (DEN) also looks good in this market environment.

Daily Chart of Denbury Inc. (DEN) – Source: TradingView

The oil and gas stock is consolidating in a tight range with resistance near the $100 “century mark,” as legendary trader Jesse Livermore would call it.

A high-volume breakout candle through that level would make me consider a buy.

Enphase Energy, Inc. (Long Idea)

Enphase Energy, Inc. (ENPH) has been a monster all year. 

Daily Chart of Enphase Energy, Inc. (ENPH) – Source: TradingView

The solar sector has been a standout pocket of strength throughout the bear market, and Enphase is one of the top names.

We made good money on the breakout in July as the stock surged 40% in less than three weeks. 

A new breakout from here could trigger a similar move.

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Ross Givens
Editor, Stock Surge Daily

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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