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Sing Trade Ideas – May 18, 2020

Market View

World markets are strong premarket after last week’s weakness. Big news this morning is MRNA announcing positive positive data from a Phase 1 Covid virus trial involving 45 individuals. Note: very preliminary data.  Markets were already positive before the MRNA news, possibly just a bounce or Powell’s interview where he restated the statement that the Fed still has lots of ammo.In the premarket energy, travel and leisure, small caps and financials (i.e. all the beaten down stocks) are strong. Expect the biotechs to continue their run after the MRNA run. SPY is now above the 290 level in the premarket and short covering and positive gamma now bring 295 as a target. Above 295, the SPY has broken out of consolidation. Need to watch the quarantine stocks for weakness with the Virus news e.g. PTON, ZM etc

Premarket names:

MRNA, airlines, materials, travel and leisure, Cannabis and banks

Stock Idea: IWM Long

Should the market breakout from consolidation to the upside, the laggards will be the biggest movers. Sector ETFs are the simplest way to participate. The laggards are IWM, XLI and XLF.
IWM is the idea for today. It is in a bear market with high short interest. No guarantee for continuation but IWM is strong premarket. Short term resistance levels to watch are 134 and 137.   Could have a dip in the morning for entry to avoid chasing.