BreakoutPickr Daily Blog

We are not doing much here. The market is stuck in a range and it’s risky to be long at this time. We are short DGW and it has worked out so far.

We went short DGW around $19(from our watchlist).

Looks like the rally is over for now and we might be looking at the resumption of the correction. Hence we will bring some short picks to profit from the decline. The market is getting more volatile and hence there is no need to use bigger position sizes. In fact, half the position sizes are sufficient to make the same amount of money.  Here is the chart of DGW. Once it breaks below $19, we will go short.

Yesterday’s price action in the leaders was worrisome. When the broader market gapped up, the leaders were not up like we expected. They were underperforming the market and that’s a first sign. Before the broader market started tumbling, leaders like NFLX got sold off in heavy volume. The new breakouts like OPEN, ASPS and IPXL failed. This is not good. We are not selling our positions yet. We will just give it one more day to see how it goes. Also, there might be window dressing towards the end of the quarter that might artificially push the market up. So, we are still holding on to our leaders. It’s also a good idea to trim some gains in CRUS, IGTE, OVTI when we have them.

UPDATE: We closed out all of our long positions as the market closed below the 200 day MA and the leaders are getting pummeled. We are in cash right now.

The market gapped up and is trying to fill the gap. Some of the leaders are acting well and some leaders pulled back. For example, IGTE and MELI are up by 5% and LOGM is down by 5%. ASPS and NFLX continued to pullback and are down by 2%. Overall, it’s a choppy day with no direction. The leaders are consolidating here after a great last week.

Coming to the new breakouts, LVS, SPRT and IPXL brokeout from our watchlist today. Keep an eye on SPRD.

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