Tuesday Top Trades

RLT Newsletter 4.6.26

Not much happened on Monday. The market closed slightly higher, and most of my watchlist was mixed with small gains and small losses across the board.

That said, both SPY and QQQ have now put in four consecutive bullish candles with declining volume each day. If we gap up or continue pushing higher into the 200-day SMA over the next day or two, I view that level as solid resistance. I’ll be watching for selling pressure to come in there, which could push us back down for a retest of Thursday’s and Tuesday’s large bullish candles.

If we start breaking below Thursday’s low, that’s an early warning sign. A break below Tuesday’s low would be more significant and would signal another flush lower. However, as long as those levels hold, which they should, the next pullback should be buyable with decent risk/reward. The target would be a move back above the 200-day SMA and potentially into the 100-day SMA, which is now curling lower and should act as another strong resistance level if we get there.

There are still some concerning bearish structures across key names like GOOGL, MU, NVDA, and AVGO. We’re seeing potential double tops and head and shoulders patterns, so if those recent pivot levels start breaking, we could see another round of meaningful selling.

That said, my stance hasn’t changed. I’m still looking for a bullish bounce during April and leaning net long while trading around key levels. That means staying quick and nimble each day, taking profits into resistance levels and looking to re-enter on dips.

As long as we remain below the 200-day, I remain cautious. But this still feels like the type of environment where we get a choppy, overlapping, frustrating B wave bounce.

SPY Daily Chart

Robinhood Markets Inc.

HOOD has fallen 58% from peak to trough after topping last September, well before most tech names put in their highs. It broke both the 100-day and 200-day SMAs early, giving clear warning signs of the weakness to come.

At the same time, it was up a massive 417% from its April lows, so a retest was more than warranted. That retest has now brought it back to a critical level, with confluence at the 100-week SMA, the prior all-time high, and the anchored VWAP from the November 2023 pivot.

The last time weekly RSI hit this level, it marked the absolute low on the stock. On top of that, we now have bullish divergence building on the daily RSI.

What I really love about HOOD right now is the clearly defined support level that should hold, and a very clear point where the bull thesis breaks down. Any sustained move below the $63.00 level is a major problem for the bulls. It’s also important to remember that just because a stock is down 58% doesn’t mean it can’t drop another 58%. We’ve seen that play out before, just look at Robinhood competitor Webull.

If HOOD can bounce here, the first major resistance sits around $85, with minor resistance near $75. A move to $85 would represent roughly a 30% gain from the 100-week SMA.

There’s also an unfilled gap at $98, which would be about 50% higher for those with strong holding power. For those who still believe in the long-term fundamentals, the Elliott Wave structure does suggest the potential for new highs.

That said, I don’t think HOOD makes a move to new highs without the broader market participating. I would need to see much more confirmation before leaning into that scenario.

HOOD Daily Chart

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