Continuing To Build A Watchlist
Updated: Apr 1
While I am still very cautious on this market and remain in cash, I'm continuing to build a watchlist of stocks that have a potential for strong moves should the market begin to rally. It is a big mistake to completely tune out the market as conditions can change extremely quickly. Being disciplined enough to do your homework each weekend is a prerequisite for trading success.
The semiconductor space contains many stocks that may offer potential in 2021. Globally, we are currently in the midst of a shortage of semiconductor chips due to a variety of factors, including the pandemic, fires, drought, and snowstorms. AMAT broke out strongly this week, but I decided not to take the trade as I'm still cautious on the market. However, there are other stocks that offer potential in this space. Some of these include MKSI, COHR, QRVO, NVDA, and AMD. Technically, MKSI and COHR are shaping up the best in my opinion.
Housing related stocks are also shaping up well. LGIH has a beautiful looking chart with lots of accumulation. Like AMAT, I let this one go without me as I'm still very uncertain where the market is going. RH broke out convincingly this week as well, and Lennar is also looking fantastic. HOME, LOVE, and Wayfair are also worth watching.
The crypto market is also a space that I'm watching closely. RIOT, MARA, and SI are most likely to benefit for a strong uptrend in Bitcoin, with MARA setting up best technically in my opinion.
I also believe travel may become an important theme in 2021 as the world starts to open up once again. Airbnb continues to be very high on my watchlist for an entry. Although I was stopped out of my initial buy, I will not let that deter me from entering once again should another opportunity arise.
Overall, I'm still content to sit in cash and wait for the market to give a clear sense of direction. While stocks like AMAT, LEN, LGIH, and RH may turn into monster winners, I've made peace with the fact that I will never be able to own every stock. However, the good news is there will always be other opportunities as long as I'm prepared for the market's next uptrend.
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