Hey, Ross here:
Markets may have closed higher yesterday – but it was a very volatile session.
In that vein, let’s make sure we stay prepared for any possible declines by looking at an actionable short trade idea.
Chart of the Day
America’s favorite drug dealer, Pfizer (PFE), has been steadily declining since the start of the year.
The stock is down 24% for 2023 while the indexes are positive. This represents significant underperformance as shown by the steadily declining relative strength line at the top of the chart.
PFE now trades below declining 21, 50, and 200-day moving averages which is extremely bearish. If the general market flushes lower, this one is going to really fall apart.
The decline in Pfizer stock has been a long time coming. The global pandemic that took and ruined millions of lives has been a profit windfall for the company.
The effectiveness of these vaccines is fiercely debated. But their profitability is undeniable.
But COVID won’t be here forever. And the company’s record sales growth has come to a screeching halt.
The key level I am watching is $41. This was the last line of support in 2022 and is quickly turning into resistance for PFE stock.
It also coincides with the 21-day moving average which is likely to contain any short-term bounce higher.
Consider taking a short position in PFE in the $40-$41 range. I don’t think one needs to risk more than about 4% on the trade. A buy stop at $43 should be adequate if the downtrend is to continue.
P.S. Want me to send you special trade prospects and potential market moves directly to your phone? Text the word ross to 74121.
Insight of the Day
The groundwork for a massive market rally has been laid.
I’m now convinced that the groundwork for a massive market has been laid.
Other than Powell’s far more dovish stance at his press conference, the signals from the bond market are clear – a pause, and even cuts, are coming.
Of course, Powell himself will never admit this beforehand. The markets will react to any such comments – meaning his hands are tied. That’s why he’s still sticking to the “we just don’t see rate cuts happening this year” narrative.
But I believe we’re now in rare territory – the relative calm before a massive market surge. It’s prime fishing waters for choice stocks.
I’m sharing how you can identify some of these choice stocks using a sneaky system I learned during my time deep in the belly of Wall Street.
And because Wall Street has abused retail traders for so long, I’m making this system available to you for only $5 – less than a dime a week. Click here to find out more.
