Monday, April 25, 2016

Big Week

This week we have quite a few possible market moving events; earnings from Apple and Chipotle on Tuesday, Facebook on Wednesday along with a Fed meeting, Amazon and Gilead on Thursday.

We also have a couple of breadth indicators at interesting levels; Stockbee's amount of stocks up 50% or more in a month is now above 20.  When we have more than 20 stocks up 50% or more for the month, the market tends to slow down a little bit.  I certainly don't want to get overly aggressive on the long side in the short term especially in the sectors have fared best in the last few days (commodities).


My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


        

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Monday, April 18, 2016

DOHA

The futures are slightly under pressure this morning partly based the oil news from Doha (Oil prices dive after producers fail to agree to output cap).  When the news first came out oil futures took a nose dive and equity futures when they opened did as well, but have recovered 75% of the initial loss.


My trading watchlist has dwindled to a handful of names over the last few days from a lot of names a little over a week ago.  Which means I will probably be doing less until the market moves sideways to down and more set-ups emerge. VNCE holding was the lone standout from Friday's list.

TXTR, FEYE, SPLK, RRTS, FARO, IAC, TROX, CBK, SPLS, SAIA, MCRN, are the names on my list today.

  • I only have an interest in getting involved in these stocks if they go through their previous day high.
  • These set ups have been consolidating for a few days and what we are looking for is an expansion day to jump on board for 3-5 day move.
  • CHARTS

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


       

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Thursday, April 14, 2016

Vince Big Base Breakout Coming

Vince Holding designs, merchandises, and sells fashion brand products in the United States and internationally.

The stock has been a dog ever since coming public a couple of years ago, however, things might be changing here in the short-term. Nothing says 'passing the baton' in the trading world than a breakout from a long base.

I'm always intrigued by huge bases from stocks that are trading near their 52-week low.  A long base that was preceded by a long downtrend usually means that the sellers are no longer in control, they've run out of supply, and or the buyers (new set of stockholders) are now stepping in and taking all the stock they can get from the sellers.  The new shareholders obviously believe that greener pastures lie ahead. VNCE has been trading sideways for roughly 9-months, it is safe to say the buyers and sellers found equilibrium.  At the beginning of the year, the buyers started to take control; that is easy to see with the pattern of higher lows that commenced in February.  Late February VNCE broke out from the top of its trading range ($6.27) and immediately made a 29% move.  Since then, the stock has pulled back and retested and is still retesting the breakout zone.  If the stock can manage to get back and hold above $6.30, it would provide trading speculators a good risk reward zone to pick up some shares and look for a move back to the recent high $8.10.



My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


      

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Previous Articles about bases;

Stocks Are Working

Unlike the rallies of the last 15 or so months, individual stocks are working, they are moving, and it's not only Facebook, Amazon, Netflix, and Google.  THC, FEYE, SPNC, PAH were some of the standouts from yesterday's list.

I have a very short list today compared to the last few days.  As the market moves higher my list will more than likely get smaller by the day until we get a pullback or some sort of consolidation. This market has been rotating from sector to sector, what has been strong takes a break and what has been weak gets bid up, not sure what sector is left to get bid up here in the short-term.

Here's my list for today; WLB, VRSN, FIVN, VNCE, RUN, MCRN, CHARTS.


  • I only have an interest in the stocks above if they go through yesterday's high plus a few pennies.
  • The market will either get me in or keep me out.
  • The time frame is roughly 3-5 days.
  • No one has ever said better than Pradeep Bonde; stocks move in momentum burst that last 3-5 days (I'm paraphrasing), and that is what we look to take advantage of.
My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


        

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Wednesday, April 13, 2016

Morning Gap

We are walking into a decent overnight gap higher, I'm not a fan of chasing gap ups nor buying my alerts if they trigger right at the open.  Oil names and miners were the big winners yesterday, we've highlighted a bunch of those name last week here --CHK,CLF,CNX,BTE,WPX,MUR,ECA.  $AR was the big standout from yesterday's list, another oil name, Huge Base Breakout


On my list today; WLB, FOE, WAB, PAH, THC, FEYE, FIVN, SPNC, VNCE, DBD, DDS, TWTR, CENX, SAIA, YELP.


  • There are 3-5 day long swing set-ups.
  • I only have an interest if they go through yesterday's high plus a few pennies.
  • Most of these are tight set-ups, the stops are close by, and it won't be hard to tell when you are wrong.
  • CHARTS

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


       

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tuesday, April 12, 2016

A Huge Base Breakout In The Oil Sector

Antero Resources is an independent oil and natural gas company; the stock happens in one of the hottest sectors since the January lows which is the energy sector.

$AR is trying to emerge from a 9-month base; I'm always on the look out for breakouts from big bases because a prolonged period of contraction leads to a prolonged period of expansion.

Antero started its base in September of 2014 after being a long term downtrend right along with the entire energy sector.  Once a stock starts to base after a huge decline it typically means that the buyers and sellers have found equilibrium and the sellers are no longer in control.  The new set of shareholders obviously see greener pastures ahead.  At the very end of these bases what you want to see is a pattern of higher lows, this tells you that the sellers are running out of supply and or the buyers are getting antsy and don't want to wait to suck up more supply, exactly what we have seen with Antero, a series of higher lows since
January.



Antero has tightened up considerably right below the breakout level giving us a great risk reward set up.

Previous Articles about bases;

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


      

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Momentum Waning

Overall momentum has been waning across the board except in the oil and mining names, which are extended now in the short term. CLF, TAHO, WPZ, are some of the commodity names we were involved with over the last few days.





The SPY on the 30-minute chart has a pattern of lower highs and lower lows that started at the beginning of the month, it has also been struggling with its 5-day moving average.


We still have a decent amount of tight set-ups that with a little help from the market can do well over the next 3-5 days.

SSYS WLB PAH THC FEYE TASR AR TWTR POT RUN FSTR FMSA YELP are the names on my watchlist that I have an interest if and only they go through yesterday's high plus a few pennies.

FINL, DBD, LULU, are three mean reversion type plays of interest if they can go green.

Charts of the Tickers above.

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


         

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.


Friday, April 8, 2016

The Stephen Curry Of Trading



There is one thing that does not get mentioned at all when it comes to trading, and that is adaptability. One or two guys are constantly talking about it now, specifically Dr. Steenbarger.  Most trading books tell you to stick to one strategy that a disciplined trader knows his set-up and sticks to it, and when the market is not favoring his set up, then he'll sit out. Whatever.

I believe in changes and adaptability, the market changes; it has different cycles where different set ups work.  In a bull market, you can buy breakouts; a range market typically mean reversion works better, etc.  I've played basketball almost all my life, and my game has changed due to my age, I can no longer do the things I was able to do when I was younger.  But, even when I was younger playing in the boroughs of New York, I knew what my bread and butter was, spot up jump shooter, but I learned how to put the ball on the floor, how to post up a smaller guy, how to go right, how to go left, I gave myself different options for when the defense finally figured out that I was a good shooter. I feel the same when it comes to trading, you have to start with one set-up and master it, but then you have to find a couple of different set-ups for different market environments.

That brings me to Kyle Korver and Stephen Curry. Korver is a three-point specialist; he formerly held the NBA record for most consecutive games with a made three-pointer, Curry just broke that record. In the trading world, Korver would be considered a "disciplined trader" who knows what he is good at and sticks to it no matter what.  Stephen Curry at one time was also considered a three-point specialist, however, over the last couple of years, Stephen started to work on other parts of his game. He became an exceptional ball handler, when they run him off the 3-point line he can now put the ball on the floor and drive to the basket, he can create his own shot, he diversified his game.  You take away the 3-point shot and Korver becomes practically useless while Curry would still be incredibly effective.

I believe that the key to trading is knowing what environment you are in, adapting to that environment, and not becoming a one trick pony.


Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


        

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Contraction Leads To Expansion

Today my scans produced an enormous amount of set-ups, a majority from the energy sector.  The gap up this morning is going to make the energy plays tricky; I'm not a fan of chasing gaps.

Contraction leads to expansion, my ideal swing set-up is a stock that had an up move, traded sideways for 10-20 days; it starts to get tighter, and then expands.  Expansion after contraction from a comes from stocks near 52-week highs, 52-week lows, above and under the 200-day and 50-day moving average.  BTE and FEYE are good examples. The goal is to get involve in the first day of a new 3-5 day move.


I have 36 names on my list today, too many, they're a million ways to narrow down a list, and it all depends on what you believe in.  You can narrow if it's trading above or below a moving average, you can narrow it by price, gut feel, sector, volume, fundamentals, etc.  I tend to allow the market to narrow down the list for me.  I only have an interest in getting involved in the stock goes through yesterday's high plus a few cents.

Names; LXU, BTE, CC, SXC, CLF, FSTR, WPX, ECA, TOO, CNX, CENX, MUR, GTLS, TRGP, WLB, RRTS, CFX, NOG, FET, INT, FEYE, SPLK, CHK, DBD, GME, AMZN, QCOM, AR, UNT, IAC, TWTR, OSK, LNG, MBLY, WTW, GMLP.

Click for the CHARTS

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


       

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Thursday, April 7, 2016

Mean Reversion Trades

Below are the stocks on my watchlist for today.  These swing set-ups become actionable to me if and only if they go through the previous day's high plus a few cents.  That simple rule will and should narrow down the list significantly. The stop-loss for most of these set-ups is either yesterday's low or a 3-day low.  What we are looking for is to jump aboard of a possible new 3-5 day move on the stock.

In certain market environments mean reversion works better than you typical cookie cutter breakout, this is why it's important to trade more than one set up.  Mean reversion to me does not mean pick a stock that's down multiple days in a row and try to find the bottom.  I look for stocks down multiple days in a row and wait until they turn green, then I consider jumping aboard, the red to green action is your trigger.  CYBR and GS are two recent examples.



JNUG, SXC, IO, FSTR, ECA, CNX, AUY, CENX, JOY, WLB, EC, CPA, RRTS, VNCE, DDS, DBD, GME, WTW, AR, CLF, ARCO, GMLP, RGLD, SAVE, QRVO, SXCP.

The down opening will probably eliminate 75% or more of this list, remember, the trigger is ONLY AND ONLY IF THEY GO THROUGH yesterday's high.

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


      

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Wednesday, April 6, 2016

Stocks I'm Watching Today

Below are the stocks on my watchlist for today.  These swing set-ups become actionable to me if and only if they go through the previous day's high plus a few cents.  That simple rule will and should narrow down the list significantly. The stop-loss for most of these set-ups is either yesterday's low or a 3-day low.  What we are looking for is to jump aboard of a possible new 3-5 day move on the stock, NFLX and WDAY are two recent examples.











My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


     

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tuesday, April 5, 2016

A Huge Base Breakout In The Hottest Sector



Tahoe Resources explores, develops, and operates mines in the Americas.  The Company primarily produces copper, gold, silver, lead/zinc, and natural gas and petroleum.  Very simply, Tahoe is part of the hottest sector so far this year which is the Juniors Gold Mining Sector (GDXJ).

I'm always intrigued by huge bases from stocks that are trading near their 52-week low.  Normally a prolonged period of contraction leads to a prolonged period of expansion.  Tahoe Resources traded between $7.45 to $9.85 for about 9 months, it broke $9.85 to the upside and immediately tacked on a 16% gain in 2 days.  Since then pulled back, retested the 9-month breakout and so far it is bouncing off it.  This type action is very constructive and it gives you an opportunity to get in with a very good risk reward ratio.



Prior to Tahoe's 9-months of sideways action, the stock was in serious downtrend along with the entire gold mining sector, the sellers were in a control.  As it started to base, the buyers and the sellers started to find equilibrium, by the beginning of the year the buyers started to take control, every pullback was being bought aggressively.  A pattern of higher lows ensued, which is exactly what you see right before a stock with this type of basing pattern does before it exits the base and makes a big move.

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


     

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Previous Articles about bases;

Sunday, April 3, 2016

Some Interesting Charts I'm Watching

Below are a few breadth charts that I'm keeping a close eye on that can potentially be actionable in the short term if price confirms it. The first step would be a lower low in the $SPY on the 30-minute chart ($203.98).

Here you have the Russell 2000 vs. the 5-day moving average of the net number of 1-month highs minus 1-month lows.



Russell 2000 vs., stocks above their 20-day moving average.



SP-500 vs. the average SP-500 stock above their 3,5, and 10-day moving average.


The above charts all show a small slow down in the participation of individual names versus the SP-500 and Russell 2000.  This is not actionable on a stand-alone basis if price does not confirm it.  The first thing to look for is a lower low in the SPY followed by a lower high.

My opinion and outlook are subject to change as new information comes in. 

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


    

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.


Recap Of The First Quarter

Depending on how you look at it, the 1st quarter was the most eventful and uneventful quarter in a while. The SP-500 lost -12.7% in the first 12 trading days.  Sentiment was dreadful; RBC Dain advised their clients to sell everything, Soc Gen--"75% decline isn't that crazy," George Soros hinted that it could be 2008 all over again.  On cue, the SP-500 rallied 7% in a few days just to lose -7% a week later that put the SP-500 down -12.8% by 2/11/16.  On 2/12, we embarked in another V-rally in which the market grinded higher for 25 days virtually without any down days.  These V-rallies have come immediately after steep pullbacks that were accompanied by "bad news", this combination makes it really hard for many to believe that it is sustainable.  Many finally capitulate weeks after, go long and strong, and suddenly point at the things that they consider bullish that can take the market even higher.  The funny thing is those things that they deem bullish were in place when the market was down 12%, specifically sentiment. 



The previous V-rallies lasted roughly 26 days, generally by then is when we hear a ton of bullish things; "lockout rally, the wall of worry will fuel the rally further," etc. This could very well be the case, however, getting overly aggressively after 26 up days has not paid off. The one big difference that separates this V-rally from the others is breadth. Breadth was extremely strong; we have not seen such a broad participation in a long time; last year is was all about a handful of stocks (Facebook, Amazon, Netflix, Google) the current rally was led for the most part by the Russell 2000. One can make an adamant case that such strong breadth bodes well over the intermediate time frame, this is good for us.



Over the past 15-months, the SP-500 is flat; it has traveled 4,700 points to end up exactly where it started.  Sentiment has been predominantly bearish during, this time; this is normally considered a contrarian indicator with bullish implications, but an essential ingredient has been missing--optimism. The lack of optimism has been holding the market back; no one is excited.  At some point in the future, the wall of worry is going to be unwound, and that will have bullish implications.  As of now, bearish sentiment is something to keep in mind when the market is down huge as a bullish reason to do some buying.



The current election might be a small overhang for the market that will probably be felt in the summer months. 


We have a plan in place for a few market scenarios.

Miscellaneous notes;
  • Last year's biggest losers have turned out to be this year's biggest winners.
  • Gold had a tremendous move that peaked on 2/11 when sentiment got euphoric; Jose Canseco, Mark Cuban, Financial Times article "investors going bananas over gold". .
  • We are probably here when it comes to the SP-500.

  • My opinion is subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.


   

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.