Exit Short BAC
Exit Short C
Exit Short GD
As stated above none of these names are out of the woods in terms of overhead resistance, but for our timeframe and risk management these cannot be justified as Short holdings at the current time. All have proven the basic shift of trend that I look for which is a higher low and higher high. I don't Short uptrends.
Speaking of rotations, flows continue into Energy and the once lagging Healthcare sectors. We are entering both Chevron (CVX) and Medtronic (MDT) this week.
Enter Long CVX
The past 5 weeks the stock entered its resistance band and consolidated tightly. This showed a lack of sellers and that buyers were gaining control. This week we saw a significant surge through this key inflection level. I have stated many times in the past 10 months that I wanted nothing to do with CVX below $100. This week it convincingly broke through the psychological barrier and the action has turned decidedly bullish.
One thing to always remember, its not really important what you think should happen. I thought CVX was in big trouble as long as it held below $95. But when the market proves your theory wrong and price does the opposite of what you expect, the moves that come can be strong.
The setup here is simple: as long as Chevron remains above the prior resistance level and recent swing low at $92.25 we want to be Long this name. They will report earnings this week so some added volatility will be present, but our risk is clearly defined and the trend is now in our favor.
Enter Long MDT
The stock has now closed at a new weekly closing high and has done so after a tight 4-month sideways digestion. The launch pad is now in place to send MDT higher and we have a clean entry signal.
Stops will be placed below the recent pivot low at $73.40 which would suggest a failed breakout and trend invalidation should it breakdown from there.
Our Lg-Cap Portfolio is now 55% Long: GE FB AEP PCG PM UNH SHW PEP MSFT CVX MDT
and 45% Cash
Utilities got smacked this week but trends remain in place long-term
Rates and rate sensitive names got freaky this week, likely due to the pending Fed decision on interest rates next week. The Federal Reserve will announce their rate policy for April this coming Wednesday so expect some volatility around the event. Its widely expected that there will be no change which would seem to be bullish for Utilities, Bonds, and other high yielding assets. Keep that announcement on your radar and lets see how the market responds to any policy deviation.
Thanks for reading