Watch out for dip buyers: take your profits
If you’ve been a falling buyer lately, I would say today is the day to take profit. If not today, then early tomorrow. The fades got tough at the end of the day when they arrive. Yesterday we didn’t have any, so it was a good change, but a lot of the names in the tech momentum that I’ve been following are either tough for the third day in a row or really extended.
– BigCommerce Holdings (BIGC), yesterday’s tech mention, has already grabbed 6% more today. Once it broke through resistance, buyers swept this one sharply to the upside. We are already close enough to the initial upside target that traders will take some of it out if they buy the breakout.
– Cloudflare (NET), a mention of October 4, only went from $ 115 to $ 165 without a single day of downtime. This move blew me away, but if you buy on the tenth day in a row after a 45% move, you definitely put yourself at a drawdown risk.
– HubSpot (HUBS), a business of this week, went from $ 694 to $ 808. I had under-planned this move, but it made for a quick and easy exit.
Big tech used to be a great place, but running is now like asking to get punched in the face. Now is when you take profit or admit the run happened without you, so the next best game is to watch a pullback. It doesn’t mean that you are just buying on a withdrawal, but that you have a plan. Do you prefer Fibonacci retracement levels or a touch of a moving average or a retest of a previous breakout level? Focus on that.
And I’m not saying short or bearish. In terms of sales, I am not advocating selling everything but rather adopting a profit-taking and considering a trailing stop or a price addition.
We are preparing to enter the results season. While financial data rarely annoys markets with their earnings, next week will get much more interesting as Tesla (TSLA), Netflix (NFLX), Intel (INTC), Snap (SNAP) and ASML (ASML) are big names. These are all names with a market cap of $ 100 billion to $ 200 billion, with the exception of Tesla which is nearly $ 800 billion. While he still isn’t the week for gains on the tech side, this has the potential to influence action. Keep this in mind before having happy hour in the weekend after the close tomorrow.
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