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GameStop has shown the true value of a loss-reducing sell rule, with stocks losing an additional 5% to trade as low as 43.22. This represents a free fall of 91% from its historic high of 483, the historic high for the Wallstreetbets Brigade. session.
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GameStop (GME) stock is still up 127% since Jan. 1 amid Thursday’s congressional hearing on extreme market volatility last month in stocks.
The golden rule of investing is to cut losses – ideally to 7% -8% maximum – and let the winners roll.
Watch for strong action after the regular close session Commercial office (TTD), Materials applied (AMAT) and Year (ROKU). All three have significantly outperformed major indices since the coronavirus crash ended on March 23 last year.
IBD called a new uptrend likely underway on April 2 of the same year.
The reason: The S&P 500 had a key follow-up day with a strong gain on this session in higher turnover on NYSE compared to the previous session.
This significant bullish day came on day 8 of a new rally attempt after the major indices completed their decline in the bear market.
Other key clues on Thursday reduced significant morning losses.
The S&P 500 fell about 0.4%, while the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, reduced its loss to 0.6% after falling more than 1.5%.
Notice on a daily chart on MarketSmith or Leaderboard how QQQ is testing institutional buy support at the 21-day exponential moving average.
Beyond GameStop: 2 New Breakthroughs
In the meantime, Wells fargo (WFC) held on after Wednesday’s notable breakout.
Please refer to the annotations on WFC’s daily and weekly charts in the leaderboard to identify the correct buy point and 5% buy zone.
Wells Fargo Benefits from Federal Reserve Likely Removal of Growth Poor Restrictions; please read more in this new IBD Stock of the Day story.
Will Wix.com be a market leader in 2021?
Wix.com (WIX), discussed on IBD Live Thursday, also made a stunning breakthrough.
The web design expert broke the high of a nearly six-month consolidation base that showed a buy point of 319.44.
Shares jumped 13% in massive revenue which is already the highest in a single day since August. The 5% buy area rises to 335.41.
Notice how the stock frequently reached upside resistance near 300 as it carved out a new chart pattern.
Thus, we could have bought some stocks as it cleared short term resistance at 298.84, 10 cents above the October 14 intraday high.
Wix posted a net loss of 3 cents per share in the fourth quarter, but sales growth accelerated, up 38% to $ 282.5 million. The company recorded year-over-year revenue increases of 24%, 27% and 29% in the previous three quarters.
For now, The Street expects Wix.com to post a net loss of 31 cents per share in 2021 against red ink of 44 cents in 2020, then bounce back in the dark with a profit of 38 cents per share. action in 2022.
Wix.com, a large cap, has 55.4 million shares outstanding.
According to IBD Stock Checkup, Wix has a composite rating of 55 on a scale of 1 (wizened) to 99 (wizardly). A net loss in 2020, puncturing the stock’s earnings per share rating to 7, is indeed damaging the composite score. However, the stock’s 82 relative strength rating, a sharply rising relative strength line, and the B build / distribution rating clearly favor Wix. Shares are now up 37% year-to-date.
In other markets
Investors took a break from selling long-term US government bonds after another week of austere numbers on the jobs front.
The Labor Department reported that first jobless claims for the week ended February 13 climbed to 861,000, eclipsing Econoday’s forecast of 773,000. The previous week’s total has been revised up to 848,000 initial requests. Meanwhile, the Philadelphia Fed’s Monthly Manufacturing Survey fell in February to 23.1 from 26.5 in January, while beating the consensus forecast of 20.
The yield on the benchmark 10-year Treasury note held steady at 1.29%, but is still up sharply from 0.93% at the start of 2021.
Three-month Treasuries remain extremely low at 0.03%.
On Friday, the 30-year long bond yield rebounded above 2% and now stands at 2.08%.
Oil and gas stocks reversed the decline on Thursday amid a 1% decline in West Texas Intermediate crude oil futures to $ 60.52 a barrel.
Please follow Chung on Twitter: @saitochung and @IBD_DChung
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