Don’t worry be happy Rally

It’s important to look at charts from time to time. They don’t lie and helps one to see the market for what it is.

Here are the market observations for today.

1. The market is worried about D.A.I.T Delta Afghanistan, Inflation and Taper Tantrum and that has been the source of volatility this month but today the market is rallying on a belief that by the end of this week, the Federal Reserve will calm down the market anxiety.
2. Fed reserve chairman will speak at Jackson Hole symposium (Thursday-Friday)
3. The S&P 500 is up 1.1% month to date, while the blue-chip Dow has gained 0.5% and the Nasdaq has climbed 0.3%. But all this bullishness has only been in the index whereas the broader market has only suffered.
4. It is the choppiness in the market that has been the source of all the pain. Stock makes a big move, traders get excited and then all the gains disappear in the following few days and weeks.
5. The Russell 2000 jumped more than 1.6% on Friday. Today, it has added another 1.36%. This is a good sign as it rallies from the bullish base/200 dma. But the big question still remains: When will small-caps, growth stocks, and speculative names get some sustained momentum?
6. One can hope that this performance divergence will end and the market will reward opportunistic traders.
7. I am happy to see that the trade like AMRN is working now. The stock is up 10% today. The stock is getting momentum fuel from encouraging fundamental news flow that the drug is helping heart patients in a big way.
8. It just took 1.5 months for Pfizer to rally 25%. Yes, it was a simple nudge past $40 that did the trick.
9. When a stock makes a new high, one should be optimistic about the future. Will AMD rally with a base at 101-104? 
10. Taiwan Semiconductor Manufacturing TSM is at the Line of Support. If you are a long-term investor, then this is one of the best levels to buy the stock. Having said that, if the market cracks and the stock cracks below 105, then one should be out.
11. Macy’s continues to be a breakout buy and ride candidate. The stock is now at 22.5
12. Will Palantir PLTR hold 23.5 – the gap support because if it does, then only it will head higher.
13. The stock on run: 1. LendingClub and 2. Unity Software. I recommended both of them earlier this month and they continue to be an excellent buy and ride candidates.
14. CLF is a Buy and Hold stock for 2021. As long as the stock holds 100 dma, one should be bullish on the stock.
15. Who would have anticipated that a coal company would rally 7x in 5 months and that too in Biden administration but it did? Sometimes, our biases prevent us from taking an obvious trade.
16. With FDA approval, there is a hope that companies can put in vaccine mandates for their employees, customers, and suppliers without legal issues. Has this sparked some buying in travel stocks today?
17. Bitcoin has a cult following and it is back to $50K. This means bullish interest in the Bitcoin ecosystems like MARA, RIOT, Coinbase, and Silvergate Capital. I like Silvergate Capital as a Buy and Hold stock. 
18. Sphere 3D Corp gapped up to a new high on Bitcoin mining news. The stock came down to fill the gap and I recommended it near $4. The stock should hold the support of 3.49-3.75.
19. What is a choppy trade? Take an example of RIG. One day it collapses with the price of Oil and then it bounces back strongly with the price of Oil. There is no price action consistency and hence one should avoid such stock in this market phase.
20. Investing is a microcosm of life. Within it, we experience joy, uncertainty, frustration and struggle.

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers