Vlad’s Top Tech Trade Set Up!

RoboStreet – January 30, 2020

Tech Sector Is A Buy On Pull Backs

The stock market has hit a headwind of resistance tied to the uncertainty surrounding the spread of Coronavirus. SPY traded to a new all-time high of $332.95 and has shed 2.7% since hitting that mark. Volatility is up and will likely persist until there is news of the virus being arrested in China is verified. 

The Fed left interest rated unchanged and treasury prices continue to go higher with yields moving lower. As long as U.S. Dollar and Treasury prices continue to go higher, equity markets will unable to make new highs.

The market outlook for the next four weeks remains the same. I expect an additional 1-3% correction in the next two weeks and the bull trend to resume by the end of February early March. However, the market has not reached oversold levels yet. I remain bullish on the pullbacks, as long as the market is above/near 50 days MA on SPY. 

 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

I expect SPY to be range-bound between $320 and $330 for the next 2-4 weeks and the bull market to resume toward the end of February. Watch $320 support levels using SPY where a rising 50 days MA comes into play. 

Our Tradespoon Seasonal Chart indicates the market is not yet a buy with lower indicator readings across the board. Plus, the first two weeks of February is historically a down period for stocks. 

The market was due for some consolidation and will present an attractive entry point for investors to initiate and add to positions in the technology sector that are showing clear market leadership. Apple Inc. (AAPL), Microsoft Corp. (MSFT), Intel Corp. (INTC) and Applied Materials (AMAT) and Lam Research (LRCX) have all beat Wall Street estimates and provided solid forward guidance. 

Both Adobe Inc. (ADBE) and Salesforce.com Inc. (CRM) reported earnings in December. Alphabet Inc. (GOOGL) and Amazon.com Inc. (AMZN) have yet to report their numbers, but the put/call ratio for both stocks is bullish. And then there is Telsa Inc. (TSLA) which is raising their sales numbers and squeezing the shorts into a coma. 

With such an array of great stocks to choose from, one approach to set up for when the market gives us a signal to buy is to own the Invesco QQQ Trust (QQQ) that owns all these stocks within the composite holdings.

The top ten holdings make up 52.7% of total assets with information technology accounting for 48.07% of assets.

Shares of QQQ are testing their 20 days MA at $220 where if breached would open up for further downside risk to $212 where the 50 days MA sits. Again, we’re in a precarious time of the earnings cycle where most of the leading stocks have already posted their Q4 results, leaving the market with few new catalysts to trade off of. 

What I do recommend is that for those reading this column that are not members of our wildly successful RoboInvestor advisory service become a member today. Since launching the service in April 2018, we are booking profits on 89.74% of all recommended trades in stocks and ETFs. 

Leading up to the current market pullback, our subscribers lock in gains of between 6.69% – 19.82% on the Russell 2000 ETF (IWM), HP Inc. (HPQ), NXPI Semiconductors (NXPI), Invesco QQQ Trust (QQQ) and BlackRock Inc. (BLK). 

The investment landscape, while still bullish, is going to be more volatile in 2020 and having a market-tested AI platform to smooth out the ride is in my view, not just a valuable asset to enhance performance, but a necessary set of tools to eliminate risk by knowing when to be fully invested and when its right to be holding some cash. 

We want to see the market undergo a constructive phase of consolidation, but at the same time, 40% of the S&P 500 stocks are in correction territory or have bearish chart patterns. Clearly, the market is top-heavy and so I want to keep our RoboInvestor Portfolio in only those liquid stocks and ETFs that are far outperforming. 

Catching the bottom of the current pullback and getting fully invested with confidence will require a combination of several factors, not the least of which is an algorithm that provides a clear buy signal. That’s RoboInvestor, an AI-driven system that is always thinking, always learning and always deciphering what to buy, when to buy it and when to sell it. Join today as a member of our RoboIvestor community and let’s make 2020 your best year in the market…ever. 

 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.