June 19, 2019

Basic plan subscribers: Please see this June 17 video which was made for premium subscribers. It includes an honest appraisal of the service since its Nov. 3 inception. One of the messages of the video is that we can in the future expect substantially more "swing-trader setups," i.e. pullbacks, than the service has offered to date. This is intended to accomplish a few things, among others:

1. Increasing the number of actionable setups besides the standard O'Neil-style base breakouts
2. Providing more short-sale opportunities during a bear market

While the flagship setup of this service may likely always be breakouts, pullbacks, for those who embrace them, can offer opps in a leading stock in the event a breakout is missed. Post-breakout, an add-on position can be put on via a swing trader type of entry.

Most of these pullback setups have been available to premium subscribers via the nightly Focus List videos. As a guess, about 75% of these setups have been winners thus far, which I define as taking 1R in profit when using a 1:1 reward-to-risk ratio. I do not necessarily recommend exiting them completely at 1R in profit. Rather, the 1R test using 1:1 is an easy way for me to ascertain their effectiveness by quickly glancing at a chart.

I made a breakthrough in my research of short-term price movement about a year ago. At the time, I thought I had broken it down to as simplistic of a level as possible. However, about two weeks ago, I recalled a discovery I made while trading forex in 2012. This has taken things to an even simpler level than I had already made it.

My hope is that by watching the videos you will be able to add pullbacks to your arsenal, and in the process become a more confident trader overall.

***

The averages show stout tone, with a four-day pullback accompanied by mostly drying volume, followed by Tuesday's major accumulation day and Wednesday's idling on softer turnover.

There remains a paucity of pattern setups for the breakout trader. This occurs as the growth-stock glamours repair the technical damage incurred by the recent 10% intermediate-term Nasdaq correction.

CDNA, COUP, EVBG, IIPR, KL, MDB, NVCR, QTWO, VCYT have all performed according to plan. Hopefully, you are holding some of these.

In my account, I hold three names: Coupa Software (COUP), Mongodb (MDB), and Shopify (SHOP). I took Smartsheet (SMAR) on the breakout earlier this week, but exited Wednesday in order to free up capital for a Wednesday add-on purchase of SHOP. This says nothing negative about SMAR, which I continue to like and feel is acting normally.

Among the names, Dexcom (DXCM) shows hefty earnings growth estimates of 138%/58% for ‘19/’20. Revenue growth has been big, at 53% and 52% in the recent two quarters. A 91 RS stock in an 84 RS group with a B+ acc/dist rating.

Price forms a four-month cup and is up nine days straight. This is a sign of price persistency and accumulation. The key day was 6/10, when price jumped 9.9% on +257% volume to clear a bottoming formation. DXCM can be taken above the 156.16 pattern high. Earnings expected July 31 (unconfirmed).

Etsy (ETSY) shows earnings estimates of 23%/44% for ‘19/’20. Revenue growth has been in the 40% range for the three recent quarters. A 93 RS stock in an 86 RS group with a B- acc/dist rating.

ETSY forms a three-and-a-half month consolidation with a 22% depth. From Sunday’s report: “We will be keeping an eye on a possible cheater entrance that could form above the Thursday pivot high.” Accordingly, this cheater entrance has materialized and the stock can be taken above the 6/13 high of 71.80. Earnings expected Aug. 7 (unconfirmed).

NeoGenomics (NEO) is forecast by Wall Street to notch earnings growth of 63%/38% for ‘19/’20. Sales increased by 25% and 51% in the two recent quarters. A 98 RS stock in an 88 RS group with a B- acc/dist rating.

The stock sets up in a volatility contraction pattern which premium members are familiar with via the evening videos. The entrance pivot is Wednesday’s high of 24.00 and a suggested stop pivot would be Tuesday’s low of 23.30. This equates to risk of about 3.0%, or 1.5% de facto risk if a junior starter position (half of a normal sized position) is used. Earnings expected July 30 (unconfirmed).

Sea Limited (SE) is predicted to record losses in ‘19/’20. Sales growth has been giant, at 81%, 118%, 127%, and 127% in the last four quarters. The most recent quarter shows 24% sequential sales growth, considered exceptional. A 99 RS stock in a 31 RS group, the Internet – Content segment. It has an A- acc/dist rating.

Price forms a four-week ascending triangle of sorts and sets up in a volatility contraction pattern. It can be taken above Wednesday’s high of 31.59 with a suggested stop pivot of 30.40, which is Tuesday’s low. This equates to about 3.9% risk, or about 2.0% risk if a junior starter position is deployed. Earnings expected Aug. 20 (unconfirmed).

Twilio (TWLO) is expected to score earnings growth of 9%/142% for ‘19/’20, with the last two quarters of sales growing at 77% and 81%, a torrid pace. A 98 RS stock in a 98 RS group with a B acc/dist rating.

The stock has formed a quasi-ascending base and can be taken above the 6/10 high of 148.80. Earnings expected July 30.

Zscaler (ZS) is predicted by most Street analysts to show earnings per share data of -0.20/0.18E/0.19E for the July fiscal years ending in ‘18/’19/’20. Despite the trivial expected increase for the July ’20 fiscal year, sales have grown potently at rates of 54%, 59%, 65%, and 61% for the last four quarters. A 98 RS stock in a 93 RS group with a B acc/dist rating.

Despite the slight earnings growth forecast for the July ’20 fiscal year, the 98 RS rank, the powerful sales growth over the past year, and the fivefold move since going public 15 months ago suggest post-’20 growth in net will pick up.

The stock forms a four-week shelf and can be taken above the 80.38 pattern high. Last Thursday’s 3.3% move out of a two-bar pullback on +73% volume is encouraging. Earnings expected Aug. 29 (unconfirmed).

From a subscriber:

Thanks, Kevin, for your swift and always informative response. You are very generous with your time and knowledge. I adore the service and my confidence has grown since becoming a subscriber, thanks to you. I really like how you are selective on which set ups to feature and how if nothing is there, you don't force anything. I think that speaks to not only your wisdom but your integrity. I also like how you focus on finding the big winners.
Tonight's video, as always, was full of different and important lessons.  I appreciate your honest look at the first 8 months in the video tonight and your enthusiasm for the service is one of the reasons for its roaring success. As my dearly departed father used to say, when you're happy in your work it shows not only during the process but the end product. I look forward to continuing my journey and development as a swing and position trader while learning from you.  Thanks again for having the perfect temperament and for sharing your wealth of experience and expertise. I'm starting to have fun while developing that steadiness I see in you. And my account reflects that. The future looks very promising. And as you frequently comment, I'll take the future one day at a time. Take care, Kevin. A huge fan.


Kevin Marder

For intraday ideas and analysis: https://twitter.com/mardermarket

Unless otherwise noted, charts created using TradeStation. ©TradeStation Technologies, 2001-2019. All rights reserved.

The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held positions in COUP, MDB, and SHOP, though positions are subject to change at any time and without notice. Estimate data provided by Thomson Reuters. Expected earnings release dates provided by EarningsWhispers.