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8/22/22 Picking Winners: When to Buy

News:

On Friday, the markets snapped a four-week win streak.

Under the surface, it was tough to find a bright spot. 82% of all listed stocks fell while just 14% advanced.

S&P 500 map
Image from Finviz

Sector Roundup

Healthcare (XLV), with a gain of 0.3%, was the only sector to end the day in positive territory.

Financials (XLF) and Consumer Discretionary (XLY) were Friday’s biggest losers, falling about 2% each.

Notable Names

Meme stock Bed Bath & Beyond (BBBY^) crashed another 40% on Friday. This morning it’s holding support near $10.

  • It’s down about 66% from last week’s highs.
  • But still up more than 100% from last month’s lows.
  • We maintain a small position after taking some profits into last week’s spike.

AMC Entertainment (AMC^) is following suit … It’s down 33% in premarket trading.

Axsome Therapeutics (AXSM) rose 40% on Friday and is green again in premarket trading.

  • The drug maker received FDA approval for an antidepressant designed for adults 60 years old and up.

Technicals:

This morning the markets are pointing to a red open … at support.

We believe there is a strong chance that buyers will begin pushing back near the level marked on the SPY chart below.

SPY chart with support level marked.
SPY Daily Candles – Chart via thinkorswim

Watch for heavy selling intraday. A big dip is a buying opportunity. 

But we don’t recommend holding if markets close near their lows.

The signals we’re tracking…

Timing:

This week:

  • Earning season continues … You can find all the most notable calls of the week listed here.
  • On Thursday, Tesla (TSLA^) is scheduled to complete its 3-to-1 stock split.
  • Also, on Thursday, the final Q2 GDP number will be released.

Friday holds the most anticipated event of the week. Fed Chair Powell will speak at the annual Jackson Hole Economic Symposium.

  • Expect the market to hang on every word as he provides hints as to the Fed’s next move with interest rates.
  • Always remember … the market loves Powell.

Watchlist:

*Low Float
^Open Position

*FPAYresistance at $3
AKLI (Formerly DNAA) is on watch
BCAB support at $9
AXSM is on watch
COGT support at $15
SIGA support at $22
RYTM support at $23
CSIQ support at $42
INFI support at $1.20
CPRX support at $13.50
^GEO support at $7.50

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