Stock Market Watchlist: Engulfing Candles & Top Trades for Tomorrow!

The stock market gave us another action-packed day, with a massive bullish engulfing candle taking center stage. Despite starting with a gap down due to geopolitical concerns, the major indices managed to shake off the bad news and surge higher. Let’s break down the index action and explore the top stocks on the watchlist for tomorrow’s trading session.

Index Analysis

• QQQ (Nasdaq 100):
  • The QQQ started the day with a gap down following reports of geopolitical tensions, but quickly reversed course, delivering a bullish engulfing candle.
  • Closing above the 9 EMA and breaking Friday’s high, the QQQ looks poised to target the 352–355 range in the coming sessions.
  • If the QQQ maintains this momentum, a move toward previous highs could be in play.
• SPY (S&P 500):
  • Similar to the QQQ, the SPY reversed early losses to close above its 9 EMA, entering a crucial gap-fill zone between 440–442.
  • This strong bounce indicates resilience and a potential for further upside.
• IWM (Russell 2000):
  • The IWM showed remarkable strength, reversing a 1% morning drop to close 1% higher.
  • This index is holding a key support level near 174, with speculative midcaps and small caps showing renewed vigor.

1. $INOD

• Setup: Flag pattern after a strong breakout last week.
• Key Level: Break above $48 could trigger a strong move higher.
• Notes: Swing entry has passed, but day trading opportunities remain. Watch for intraday pullbacks into support levels.

2. $APLS

• Setup: Base breakout in progress. Strong volume today with a range from $28–$30.
• Key Level: Needs to clear $30 for continuation.
• Notes: Thinly traded stock but offers solid risk/reward setups.

3. $JOBY

• Setup: Breakout candidate on the back of bullish upgrades in the electric flying taxi space.
• Key Level: Breakout over $6.50 could test $7.50+.
• Notes: Speculative play with high volume today. Consider for momentum trades.

4. $NNE

• Setup: Wedging near the $26 breakout level after a 10% move today.
• Key Level: Break above $26 for continuation.
• Notes: Thin liquidity, so trade cautiously with smaller size.

5. $COIN (Coinbase)

• Setup: Inside day after strong recent moves.
• Key Level: A break above $330 could push toward $370 and eventually $400.
• Notes: Watch for a breakout or a pullback into support levels for entries.

6. $DUTCH BROS ($BROS)

• Setup: Multi-year base breakout near $32.
• Key Level: Needs to clear $32 for continuation.
• Notes: Solid volume today makes this an attractive setup for day and swing trades.

7. $ALAB

• Setup: IPO breakout play with potential for a $100 roll.
• Key Level: Break above $100 could trigger a larger move.
• Notes: Great liquidity and a high-probability setup for tomorrow.

1. Focus on Relative Strength:
   • Stocks like $INOD and $COIN showed resilience even during market pullbacks, making them prime candidates for tomorrow.
2. Use the 9 EMA as a Guide:
   • Many of these stocks are consolidating near their 9 EMA, offering strong support levels for potential entries.
3. Watch the Indices:
   • A gap up or down could dictate early morning sentiment. Adjust your strategy accordingly

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