For each buy idea, you’ll see:
1-the pattern in blue or green
2-target
3-the suggested stop in red
For each short idea, you’ll see:
1-the pattern in red
2-target
3-the suggested stop in blue
Buys
Bullish Pattern Breakouts
NFLX
Buy the dip in an uptrend
BRK.B
Severely oversold & near support
Shorts
Bearish Pattern Breakdowns
Short the rip in a downtrend
Overextended to the upside
Earnings
Bullish Pattern Breakouts
We last profiled NFLX on 8/6/24 as being one of the SIX S&P 500 names that were oversold and trading above their 200-day moving averages. If the bounce that started on 8/5 was going to continue, these stocks had favorable set ups and easily identifiable downside risk…
Fast forward six weeks later, and NFLX has caught our eye again. However, this time, it’s sporting a potential inverse H&S pattern. Indeed, the stock is way above THE low at this point, but it made a key higher low last week, which now appears like the pattern’s right shoulder. A break above the upward sloping neckline would target 810.
NFLX is among the first high profile growth name to release earnings and it reports on 10/17.
Also, let’s not forget about another Communication Services stock, META, which we discussed on 8/9. It hasn’t broken out yet, but it has hung near the upper part of its massive range the last few weeks.
Buy the dip in an uptrend
We’ve discussed BRK.B a few times in 2024, most recently on June 4th. One of the reasons was that it was forming a bullish pattern after pulling back 8%. Currently, the stock is down about 8% again from its most recent spike. As we can see, it now has had four drawdowns of at least 8% since last fall, with each of the prior three eventually leading a new up leg…
…said up legs have ranged from +13% to +30% from trough to peak. More importantly, each rally produced a higher high. If a bid in BRK.B materializes again soon, a 10% gain from its most recent low would put the stock near 490. Again, we’ve seen stronger moves over the last year, so the ultimate up-move could end up being bigger than 10% . Yesterday’s near 1% gain was a start that it will need to leverage now.
Another big financial stock that has gotten hit relatively hard but remains in a long-term uptrend is JPM.
