Stock Market Divergence: How to Trade Both Sides Right Now

Welcome to today's best trade setups. My name is Benjamin Pool, head trader here at verifiedinvesting.com. We have a divergence in the markets. We have the S&P 500 or the SPX heading higher. A lot of tech stocks are heading higher, but then we have the other side where we have a lot of stocks that are making some massive moves to the downside. So, what we're going to do is we're going to analyze resistance levels on the stocks that are up and support levels for the ones that are on the way down. Let's go ahead and dive into the charts. The first one I'm going to look at is the SPX or the SPY. So, here's this up something channel that we're monitoring. Now, we put in a little bit of bullish consolidation and so my next upside resistance level on the SPY is $718.56. That would be another hit of this up something trend line. So, that's what we're monitoring now that we've already broken this down sloping trend line resistance. We are looking for another push a little bit higher. Not a huge move, but still a move on the SPY. Gold is having a little bit of a move down just slightly negative. Still hasn't gotten to the support level at $4656. For me, that level is getting weaker and weaker. The more often times support levels are tagged, even if they don't get hit, that means that buying pressure is stepping out of the way. Now, we haven't hit it again for a while. However, that's going to be your first line in the sand. If bears decide to flush through that, I'm looking for a downside move to $4539. This is where I'd be picking up GOLD for a long play today. ServiceNow, NOW, is getting crushed today. This is what I mean. Some of the stocks are heading higher and I'm going to go into those later, but some of them are moving down substantially. Now, ServiceNow has dropped through a couple different gap fills, couple different support levels. So, if we can get a flush out a little bit more in this market, I do have a long level that should be some pretty solid support. First long level that I have is $83. Here's that first level of support that it flushed through, gap flushed through that. Here was the next level of support at this right or excuse me, green bar opening candle at about $84.76. For me, I'm looking at this $83 whole round number knowing that I can add if it does pierce that level and gets all the way down to this low pivot right here at a $81.19. So, this is pretty much my line in the sand. If it does close below this low pivot on a 15-minute closing basis, I would actually stop completely out of this trade. I don't have any short levels on the way up because of the extended move to the downside. The only level that Now, I don't see this happening. Would be a $100 pierce if we can get a nice surge up on NOW. Lululemon, here was another stock that is getting downgraded big time. Look at this. Support level, crushed this. Gap fill, crushed this. Gap fill, crushed this. Actually pierced this low pivot point. I actually still like $143.96 as a long play today if we can consolidate right on top of it. Now, normally I say when you consolidate on top of resistance or support in this case, it does get weaker. However, in the trading day, if the buyers continue to bid this up as long as it doesn't close below this low pivot at $143.21, that means that the buyers are stepping up and continuing to respect this support level and so I do anticipate a little bit of a flush to the upside or a nice bid to the upside on the chart of Lululemon. WDC had this nice push yesterday. I did mention the $400 level. This was a great pullback. Look at what happened. You got all the way down 4 and 1/2%. Now all of a sudden we're pushing back above this up swing trend line. Because we're above $400, you've got to look at where the next psychological resistance level would be and that's where profit takers are likely sitting. If you look at $425.34, that is where a lot of people would probably have their orders and now that we're above 400 for an exit price on this profit. Look at this move from the lows right here 30th of March, that would be a 70% move to the upside. Nothing's changed. Just uh bullish consent sentiment inside of WDC. So today if we can get up to 425.34, that is where I'm shorting the uh stock of WDC. Workday, WDAY. Now let's flip to the other side, right? WDAY is also getting this nice push to the downside. It's getting into a lot of support. Um it hasn't quite caught the lows that I think that's going to happen today. So what I'm doing is getting my order ready for the live day trading room going forward into the afternoon session. So my first long level is $112.50. This is a solid gap in the charts after this huge run to the upside. So once price action does get back in there, there will likely be buyers stepping up knowing that I could always add on WDAY at this double bottom area at $110.49. Similar to what's going on with Lululemon, if it does close below this on a 15-minute closing basis, then I would look to stop out of this trade and look for additional support. But that wouldn't be today. I would look next day for additional support on WDAY. Okay, now let's head back up. TXN Texas Instrument. Look I've got a couple different trend lines. Here's this pivot low here. Price consolidated right in this area. Pivot high here, pull back. Pivot high here, pull back. Pivot high here, pull back. And here was your major pullback on this up sloping trend line. So, I did have an upside move of about $260 today. However, this was a really aggressive level. Even though that this was a resistance trend line, I was targeting seven $275. Now that we're above that, I had to reassess where the chart of TXN could go. So, what I've done is taken this pivot top here. Price consolidated right here. And if I zoom into the charts, look at this. It's been respecting this up sloping trend line on multiple occasions. So, if we get a push up in TXN today, piercing the 280, it could head all the way up to $300. This is a great opportunity for a day trade, and this would be a longer term hold. Even though it blew out earnings from this low close right here, we are up 18%. Look at this chart. Do you ever see an 18% move anywhere? At least on the upside? Not really. This shows you that even this green bar candle right here, the next day you had this nice sell-off. And so, that's what I anticipate happening on TXN today. You have all the bulls on board driving this price higher above this up sloping trend line. So, what I think's going to happen, and I could be wrong, I've been wrong before, is they're going to keep this elevated, get up to about 285 today, and then tomorrow it's going to flush down. Maybe not all the way back to 260, but it's going to take about a 5 to 6% haircut on the price of TXN once the buyers uh decide to step out of the way. This thing is overly extended. Today though, if we can't if we if we don't stop at 285, 290, 295, today I'm looking to short this at 300 bucks. If we close around 285 today, then I do anticipate a nice rollover tomorrow. STX, another stock that's heading higher. Look at this. Now we're actually above that $600 level that I had mentioned. We are now in uncharted territory. The unfortunate part is if we're in uncharted territories on a stock like the STX, we can only use key psychological resistance levels. And that next level, now that we're above 600 bucks, would be 625. Doesn't mean it's going to go to 625, but that would be a a level that I would be interested in trading STX today as long as we start to increase the volatility. One thing that a lot of traders do fail to realize is that if you don't have volatility in the markets, you can just have the slow grind on the way up. So not only do you need to check volume, but you need to check the capitulation inside of the volume as well. So if you're getting like a 1% pullback, and then you get a nice bounce, and then a half percent pullback, and then a little bit bounce, another half percent, maybe a 1% pullback, then the bulls are in control and they are just going to continue to float this to the upside. And that could be what's happening to STX. So what that means is I need volatility. I need price action to shoot straight up into that area by about 2:30 in the afternoon. And if that happens, then I would love to pull a short on STX. All right, let's go ahead and jump into the next chart. ON, ON Semiconductor is having this nice push to the upside as well. A lot of semiconductors. Here's a pivot top and a previous uh pivot top here. All this price consolidation. If we can push up by 2:30 to 101.28, this is a level that I'm interested in shorting ON. Dell is making another push to the upside. What I was noticing is this parallel channel. So if you watched my previous video, I did mention that 210 was my first resistance level. And I said "Actually, what's going to happen is if I was in this for a day trade, I would exit the trade." And the reason is because now that we've recaptured the midline and closed above it, it is likely to push higher. So, if you did swing short this, then your ad level would be $229.74. And it really depends on when it hits the upper end of this parallel channel. That is where I'd look for Dell to get a rejection, and that would be the swing trade ad to position if you did get in at 210.28. Add position, and then wait for a pullback to the midline, and remove about half of it off of the table. And then wait for a move all the way down to the lower end of the parallel channel, which would be a right around 200 bucks. If this breaks again to the downside, then you could see a move all the way back into about $169.92. GE got to that gap of that low pivot point that I mentioned yesterday, 270.79. That level is now off the table. So, nothing to really talk about here. So, let's jump into AMD. AMD up something trend line. I love third hits. Pivot top here, secondary hit. Notice how it hit this and got a pullback. This was not as big of a rejection I was anticipating. It did put a nice topping tail, and then all of a sudden, it closed above it yesterday. So, this tells us that this topping tail has been negated. So, that's your area to stop out, and even if it's a closing price above it, you're minimizing the amount of risk that you're adding or putting in the position. Again, we're above 300 bucks. So, where would you, if you were in AMD, take profits? Are you waiting for 318, 319? Most likely, you're looking at 320 or 325. And so, for me, on a short trade on AMD, that is where I would be looking to get into this trade on And similarly with SCX, it has to go straight up into that area or that is off the table. Because on something like AMD, you can have these nice floats and just continually chop to the upside. This low pivot right here from the 30th of March, let's see what that move is. 60% Nothing changed in AMD. Yet, it's up 60%. It added over half of its market cap again just from the lows of March after all this price consolidation and uh after all this um capitulation. Big move to the downside, big move to the upside, big move to the downside, huge move to the upside. Eventually, this thing is going to come back in, retest this up sloping trend line, and eventually it's going to roll over and come back in retest these pivot tops at $267.29. Today, again, my day trade level would be about 325 bucks. And that would on AMD, that's only about an 8% move to the upside, 7%. So, that's the level. All right, GEV is having a nice push up. I have this pivot top right here, secondary pivot, third hit. Look at this, up sloping trend line. It hit it yesterday. I did not have this in the charts yesterday, but look at what happened. Got a solid rejection, got down to about 114 or uh 1,102 or 1 dollar. So, it was a decent pullback off of that trend line. Now, we're above that trend line. So, what we got to do is just take a look at psychological levels. Um I did short this in the live day trading room at uh pierce of a 100 or 1,150 bucks. I added to the position and then I removed it off of the table. So, when I talk about capitulation, let's jump into the 1-minute time frame. There was not a lot of volatility. I'm going to go ahead and get rid of the volume weighted average of price. Lot of volatility right at the open. Then all of a sudden, the shares started drying up. And then the volatility started drying up drying up. And so, this is what caused this big move to the upside with very little resistance. If we do get up to $1,165.53 by 2:00, that is a position or an area that I would like likely short GEV again. Knowing that it has to have volatility, though. If we start pushing up and slow grind, I would actually have to wait for $1,175. And the reason I would wait for $1,175 is because the next level of resistance above that is going to be psychological level of uh 1,200 bucks. And I think that would be the max upside for me on GEV. And it's starting to look really really really attractive for a swing trade. Doesn't necessarily mean that you're not going to have to dollar cost average into something like this. But with this overextension in the markets, overextension in GEV and the S&P 500, once the SPY does decide to hit that resistance level, all these stocks that are high flyers are going to come crashing down and it's going to be devastating for all those people who are jumping in right now. If you don't If you don't notice what's happened before, take a look at the CAR chart. CAR had a huge move to the upside. It went up as high as $850 yesterday and then it collapsed today. It got down to 250 bucks. So, not saying that all these are going to crash this big, but they're due for 10, 15, 20, or even 30% haircuts from this current price. Um so, that's what I have for you guys. Thank you so much for joining me um in my afternoon session. Uh let's go ahead and turn on Verified Investing. Okay. Verified Investing Extras, this is a new channel that we have. Elizabeth Copeland does a really good job of um having interviews on there and showing uh showcasing different sides of the markets that us at Investing Pros don't necessarily go over. So, please go check that out. Scan that QR code. Go ahead and hit that like, follow, and subscribe button. Ring that bell so you can get notified when those go out to the public. All right. Uh let's see if we've got any more lower thirds. Um Here we go. Verified Investing Futures Market, Peter Schiff. Nope. Okay. Traders Core. Nope. Okay. That's what I have for you guys. Thank you so much for watching me. Please make sure that you're liking, following, subscribing, and sharing with those friends so that way they can get the same market information that you're getting. Drew Dosic is going to be going to be covering uh Trading the Close this afternoon at 4:20. He will be going live and updating you on what happened with the market close. So, you guys don't want to miss that. And again, ring that bell so you can get notified when he goes live. So, with that said, you guys have a great rest of your day and take care.