Our trusty market monitor is approaching extremely bullish territory. The count for ‘Number of stocks up 50% + in a month’ is now 18, readings above 20 tend to lead to corrections. And count for ‘Number of stocks 25% down plus in a quarter’ going below 200 leads to a correction in next few days or weeks.
Both these figures are not yet extreme but would reach extreme in few days if market rally continues for few days.
BLDR DYAX RTRX NPTN EXEL NBIX BONA NFLX HASI XENT IIVI SPTN OLN
Are some of the stocks today on my watchlist.
What to look for in good anticipation setup
- series of narrow range days in pullback/consolidation
- orderly pullback with no 4% b/d during the pullback or consolidation
- low volume pullback
- low volatility during pullback
- linear first leg if looking as continuation setup
- Stock should go up smoothly and not in volatile manner
- 3 to 10 days consolidation/pullback
- not up 3 days in a row
NFLX is looking good. It recently had a big gap up in good earning and is looking to continue its leg up after digesting the first move.