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Momentum Monday: Technical Breakdowns, Earnings, FOMC and More

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Want to start the week ahead of the pack? Check out Momentum Mondays, where I cover the leading breakout stocks in the market, summarize the major events of the week ahead, and prepare investors for profitable trading.

Today, we will be taking a look at the broad stock market indexes to summarize the action of the last few weeks, then we will take a look at the economic calendar to address any market moving data coming our way. And finally, I will share three compelling technical trade setups in stocks with top Zacks Ranks.

Stocks Below Support

After bouncing early last week, stocks rolled over. All major indexes are now below important levels of support. There are signs of a bottom though, as the NAAIM Exposure index shows active managers are the most underweight equities this year showing extremely bearish sentiment, and seasonal studies indicate considerable strength into year end.

TradingView
Image Source: TradingView

Busy Week Ahead

There is a lot of action on the calendar this week, from Fed meetings to earnings reports, and major actions from the US Treasury.

Notable earnings this week come from Apple (AAPL - Free Report)  on Thursday and Berkshire Hathaway (BRK.B - Free Report)  on Friday.

On Wednesday afternoon, the Federal Reserve will conduct its regular FOMC interest rate policy meeting. It is expected to keep rates at the current level.

Also on Wednesday, the US Treasury will release its Quarterly Refunding Announcement, where it shares its debt management expectations for the quarter. This data could be a major factor in the interest rate situation.

CMEGroup
Image Source: CMEGroup

Technical Setups

Because of the broad weakness across the stock market, fewer leading stocks are set up for breakouts. The current environment calls for cautious trading and smaller position sizing.

Today, I am sharing two stocks that are more defensive in case the market continues to be weak, and two high beta names that should perform well if the market firms up. All stocks shared enjoy a Zacks Rank #1 (Strong Buy) rating, indicating upward trending earnings revisions.

TradingView
Image Source: TradingView

Bottom Line

Even the best trading setups fail. Although these stocks have numerous bullish catalysts in their favor, traders should always stick to a trading plan, and most importantly prioritize prudent risk management. Always know the maximum amount of money you can lose on a trade and respect your stop losses.

Best of luck this week!


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Apple Inc. (AAPL) - free report >>

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