Ho Ho Ho-hum (27 Dec 2024)
The last few trading days of the year are typically sleepy ones for the market, and 2024 doesn’t seem like it wants to break tradition.
Sure, there were a few exciting outliers—like Apple (AAPL) and its steady creep towards $4T…
Palantir’s (PLTR) continued flex…
and MicroStrategy (MSTR) doing MicroStrategy things.
But apart from that, the week has pretty much been a snooze fest. With Santa ghosting Wall Street, most traders are embracing the end-of-year slump and setting their sights on 2025 instead.
But for anyone still holding out hope for a profitable 2024, we’ve got good stuff coming your way that’ll keep those trade radars pinging.
But first…
Our last zones
Each week, we release alerts on stocks that are nearing or entering key zones, i.e. stocks where the action could heat up soon.
So how did our last zone signals pan out?
Prologis, Inc (PLD)
Trampoline Reactivated.
PLD’s bounce off the 101-103 zone once again shows just how sturdy this support is. That’s the fourth in two years, in case you’re counting.
Sure, it’s only up 3.5% since then… but with decent trading volume and RSI still at a chill 41 (AND if previous bounces are any indication), it could still have some ways to go.
Regeneron Pharmaceuticals, Inc (REGN)
REGN piqued our interest for two reasons last weekend:
its price is nearly the cheapest it’s been in 20 years
it’s on a zone that hasn’t cracked since 2023
The good news: Price is holding steady at $714, which means the zone is still intact!!!
The bad news: Price is holding steady at $714, which means the stock hasn’t done much else…
“But wait, who the f are you people and what am I doing here?”
Welcome to Trading Places.
We’re just a bunch of market nerds, quants, and posers who’ve stared at enough charts we dump our portfolios at the sight of a menorah.
After years of convincing ourselves that the lines and shapes we were plotting actually meant something, we finally figured it was time to upgrade our shtick a tiny bit.
So now, we get quant intelligence to do it for us.
We built an algorithm that’s deaf to the market’s siren songs. It cuts through the BS and pinpoints Zones of interest, i.e. places on the chart where actual money comes to dance.
Think of it as a Limitless pill for your stock, currency, and crypto plays—scanning the markets in real-time and determining where the action’s at.
Incoming!
Here’s what our Zone Scanner flagged today:
CVS Health Corp (CVS)
Healthcare • Healthcare Plans • USA • NYSE
There’s really no sugarcoating CVS’ decline.
Two straight downtrend years. Down by 59% from its 2022 highs.
It’s as if it knew RFK Jr. would become health secretary one day, and decided to tank in advance.
But…
Look where it’s at now:
Yep, not a typo. It’s now sitting on top of a support zone that was established back in 2012, and hasn’t been touched since.
Some of you weren’t even allowed to trade in 2012.
Just think about that for a sec.
Roper Technologies Inc (ROP)
Technology • Software - Application • USA • NASD
ROP has always been a safe bet.
Not only does its stock price deliver steady growth year after year, it has also increased its dividend for 31 straight years.
In fact, adding it to this newsletter almost feels pointless.
But we’re not talking about long-term today.
As you can see above, ROP is back at a strong support zone—one that it’s visited a handful of times this year, each time with fairly solid results.
If the same holds true this time around, we could be looking at a potential rally toward the $560s, which translates to a quick 10% gain.
But if you’re in it for the long run, we can’t blame you…
Marathon Petroleum Corp (MPC)
Energy • Oil & Gas Refining & Marketing • USA • NYSE
MPC’s 134-139 zone has always been a tough nut to bust crack.
As a resistance zone, it caused a 23% drop the third time it was tested.
As support, it triggered a +56% rally from December 2023 to April 2024.
That’s why last week’s zone breakdown felt ominous.
Fortunately, a spike in trading volume the following day brought it back into the green. It’s currently clinging to the underbelly of the zone.
If it manages to hold, it could spark another solid run into 2025.
WTF are Zones, anyway?
Zones are key price levels where the market has reacted strongly in the past—such as sharp reversals or sudden swings.
They’re areas where actual supply and demand met in the past, and likely will meet again.
“Why are these significant?”
Well, it all comes down to three key principles. We like to call them The Principles of:
When I Dip, You Dip, We Dip (aka psychology)
Traders are aware that others are watching these levels (zones) too. With everybody paying attention, this creates a self-fulfilling prophecy where everybody acts in anticipation of everybody else’s actions.
Markets Gonna Market ¯\_(ツ)_/¯ (aka technical factors)
If the first price rejection at the top of a zone was violent, it’s likely that buyers who entered at that level are now holding losses.
But with each retest, the rejection weakens, as there are fewer buyers remaining underwater. This weakens that resistance (or support for all you short-sellers), and could eventually lead to a break through.
Killer Whales (aka institutional plays)
Big players need liquidity in order to place massive orders without moving the market against themselves. So they wait for these zones, knowing a lot of us small fry (retail traders) will come to play.
This allows them to buy low or sell high without causing a lot of waves.
But remember: Zones are NOT guarantees but rather regions of increased probability for market moves. So always, ALWAYS use proper risk management.
Trading Places: Launch coming soon!
Stop obsessively refreshing your charts like it’s your ex’s Instagram.
By combining historical patterns with real-time market data, Trading Places identifies zones and assigns probabilities to each one—helping traders spot potential plays with higher chances of success.
It automates all of the curation, chart-plotting, and alerting for you, so you can actually have a life (or at least pretend to)!
Stay tuned!
Disclaimer: This isn't financial advice. Seriously? It’s nearly 2025. You should know this already.