Make America Green Again (21 Jan 2025)
Turn your portfolio green with these new hot zones
Ah, Inauguration Day! The changing of the guard. The ceremonial reshuffling of power.
A time to shake things up and start fresh.
Out with the old, in with theā¦ slightly less old. (Just kidding, President Trump.)
So here we are again, bracing for the winds of change. New plans, new policies, new facesā¦ But the market isnāt exactly rolling out the welcome mat just yet.
While 47ās first term saw a market upswing post-inauguration, this time around, optimism feels more like itās been tempered with some caution.
Uncertainty over tax cuts, deregulation, tariffs, strategic reservesā¦ meme coin shenanigans. Itās all still a bit of a mixed bag. And itās left everyone trying to figure out where this thing is headed.
But maybe thatās not such a bad thing.
We could all do well with a little extra caution right nowāespecially when it comes to spotting opportunities in this shifting landscape.
And thatās why weāve highlighted three new zones for you to look at this week.
Whatās in this issue:
ā¢ Who we are
ā¢ This weekās three new hot zones
ā¢ What are zones?
But waitā¦ who are you people and what am I doing here?ā
Welcome to Trading Places.
Weāre just a bunch of market nerds, quants, and posers whoāve 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 thatās deaf to the marketās 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 playsāscanning the markets in real-time and determining where the actionās at.
This weekās hot zones!
Some stocks our zone scanner picked for you today:
Citigroup Inc. (C)
Financial ā¢ Banks - Diversified ā¢ USA ā¢ NYSE
The good news: Citigroup dropped their earnings report a week ago, and it was a good oneāsurpassing analystsā estimates by nearly 10%.
This led to a big gap up and a sweet 8% gain for anyone holding C when the news hit.
The bad news: As of writing, the stock is inside a zone from January 2018. One thatās so strong it has foiled the stockās attempts at a new all-time high three separate times.
For anyone long on C, this could meanā¦
BUT, thereās still hope. The growing volume during this recent surge, plus the price action today, could be hinting at another ATH attempt. Maybe fourth timeās the charm?
For short sellers, though, this triple-top resistance might look like an invitation.
It could cause a bounce down to either the May 2018 zone (covering here offers a decent 8% gain), or perhaps even the February 2018 zone (up to 11%).
HP Inc. (HPQ)
Technology ā¢ Computer Hardware ā¢ USA ā¢ NYSE
HPQās November 2021 zone has always been a reliable support. Itās been tested repeatedly. Itās yet to be broken in half a year.
That alone could warrant a zone alert if weāre being honest.
But, zoom in a bit, and things get even more interestingā¦
Looking at the RSI trend, thereās a clear bullish divergence across the last three retests of this zone.
And with current RSI still in the 30s, this points to a potential rebound. If that happens, the first target could land somewhere within the May 2011 zone, for a 6-10% gain.
Nike, Inc. (NKE)
Consumer Cyclical ā¢ Footwear & Accessories ā¢ USA ā¢ NYSE
Letās all pour one out for Nike.
A storied company in a stable sector. Leading market share by a mile. Consistently solid earnings. Decent-to-good valuations.
Yet here it is, a victim of risk-on rotations and slowing growth. Blame NVDA, TSLAā¦ hell, maybe even $TRUMP and $MELANIA. Add to that Hoka as well.
This has caused NKE to tumble to its lowest price since the early days of the pandemic (before everyone discovered running).
Currently, itās hovering around its June 2018 zone.
Scratch that: it has actually penetrated the zone last Fridayā¦ but only barely. More on that later.
Right now, thereās hope. If it holds, we could be seeing a bounce back up to the zone above, delivering a potential 5.5-10% profit.
But, as mentioned earlierāthis current zone has shown some cracks. It can be broken. If this happens againā¦
Letās just say, the last time it happened, there was a -16% price drop.
Weāll be sure to keep an eye out on that too. So stay tuned on X.
WTF are Zones, anyway?
Zones are key price levels where the market has reacted strongly in the pastāsuch as sharp reversals or sudden swings.
Theyāre areas where actual supply and demand met in the past, and likely will meet again.
āWhy are these significant?ā
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 elseās actions.
Markets Gonna Market ĀÆ\_(ć)_/ĀÆ (aka technical factors)
If the first price rejection at the top of a zone was violent, itās 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 itās your exās Instagram.
By combining historical patterns with real-time market data, Trading Places identifies zones and assigns probabilities to each oneāhelping 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. This shouldnāt be news to you.