Want to start the week ahead of the pack? Check out Momentum Mondays, where I cover the leading breakout stocks in the market, summarize the major events of the week ahead, and prepare investors for profitable trading.
Today, we will be taking a look at the broad stock market indexes to summarize the action of the last few weeks, then we will look at theeconomic calendarand earnings releases to address any market moving data coming our way. And finally, I will share four compelling technical trade setups in stocks with top Zacks Ranks.
Busy Week Ahead
There is a lot of important data coming out this week, from Federal Reserve and Treasury policy to the majority of the ‘Magnificent Seven’ reporting earnings.
On Tuesday morning, we get economic data in the form of Job Openings and Consumer Confidence. Then after the market close earnings reports from Microsoft, Alphabet, and AMD.
Wednesday, in the morning ADP employment will give us another view of the labor market, and then in the afternoon the FOMC interest rate policy meeting. Although there is almost no chance of a change in policy, investors will be listening closely to the comments from members of the Fed and Jerome Powell for insight into future rate cuts.
Also on Wednesday, the Treasury Department will be releasing its Quarterly Funding Announcement. This report tells us what mix of Treasury bond/note durations will be issued to fund government spending. This has become a much more followed topic in the last few months.
Then on Thursday morning, more employment data in the form of Initial Jobless claims, followed by earnings calls from Apple, Amazon, and Meta Platforms.
Market Action
After three very strong weeks of action in the market, with indexes pushing to new all-time highs, there are signs that the market is overbought. In the chart below I note that the Nasdaq 100 QQQ is bumping against its upper Bollinger Band, potentially limiting near-term upside.
Image Source: TradingView
Technical Setups
Because I have a more cautious outlook on the market this week, with some overbought readings and a litany of important data to be released, I am sharing two growth-oriented stocks and two more defensive ones. All these stocks have Zacks Rank #1 (Strong Buy) ratings.
First, we have Duolingo DUOL, which has formed a descending wedge.
Image Source: TradingView
The next technical setup is looking at Arista Networks ANET. These first two are the more aggressive longs, which should benefit if the broader market continues to rally.
Image Source: TradingView
Next, we have Honda Motor Co. HMC, which is breaking out from a clear bull flag.
Image Source: TradingView
And finally, Davita DVA, a healthcare company which leads the industry in dialysis treatment has been forming a two-month consolidation. The second two stocks should outperform in the case of a sell-off.
Image Source: TradingView
Bottom Line
Even the best trading setups fail, so it is always important for traders to prioritize making a trading plan, following the plan, and utilizing strict risk management protocols.
Good luck this week traders!
7 Best Stocks for the Next 30 Days
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See them now >>DaVita Inc. (DVA) : Free Stock Analysis Report
Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Duolingo, Inc. (DUOL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
