Small caps were hit particularly hard in today’s follow-through to tech stocks pushing against technical limits. The iShares Russell 2000 ETF (IWM) went from a breakout above its 50-day moving average (DMA) despite a surge in interest rates and oil prices to a sharp 50DMA breakdown along with a further spike in interest rates and oil prices. The selling left Friday’s buyers “stranded”, holding a basket full of ugly stocks.
Among the worst casualties were restaurant, casino, and other experience stocks. For this occasion, I recorded a quick video of what I found with the help of swingtradebot. I posted the transcript below the video with editing and organizing assistance form ChatGPT4. I had a little fun this time asking the generative AI to write in the style of a Wall Street Journal article . The result was so stilted, I had to shave off the most extreme interpretations! (I am glad I write for my own blog).
Introduction: Utilizing Swingtradebot for Sector Exploration
Tonight’s CNBC’s Fast Money featured master Technician Carter Brexton Worth, who shed light on the challenging landscape facing restaurant stocks, among other experience-centric equities such as casinos. This prompted an exploration using the swingtradebot platform.
Methodology: Navigating the Sector-specific Search
Assuming the role of an investor unaware of the specific sector to which a stock of interest belongs, I used Wingstop (WING) as a case study. Upon inputting the ticker symbol into the “Analyze” function on swingtradebot, the system offered an array of analytical data. The principal point of interest was identifying Wingstop’s sector.
Stock Classification: Deciphering Hierarchical Categorization
A scroll through the information revealed the stock’s classification under the broader umbrella of Consumer Cyclicals, and more precisely, within Restaurants and Fast Food. The focus was narrowed to “restaurants,” aligning with the specific sector mentioned by Carter Brexton Worth on CNBC.
Analytical Sorting: Emphasizing Bearish Performance Metrics (aka Ugly Stocks)
Adopting a bearish perspective, the platform was manipulated to prioritize stocks that have recently endured significant value depreciation. This tactic immediately corroborated the sector’s bearish tendencies, as expounded by Carter Brexton Worth.
Individual Stock Examination: Metrics and Trends
A perusal of stock charts presented a multifaceted view. Certain stocks, such as Cracker Barrel (CRB) and Bloomin’ Brands (BLM), demonstrated prolonged bearish tendencies. Others, like Carol’s Restaurant Group (TAST), have yet to fully embrace bearish indicators, given their residual uptrend signals. The 50-day and 20-day moving averages (DMAs) were taken into consideration, although a 200-day moving average was conspicuously absent.
In-Depth Case Analysis: Wingstop’s Dismal Performance
Wingstop’s chart appeared unequivocally bearish, prompting a more detailed analysis through TradingView. After employing a logarithmic scale, this investigation unveiled several bearish markers, including the stock’s consistent failure at the 50-day moving average. Furthermore, the impending convergence of the 50-day and 200-day moving averages presents an additional layer of resistance for the stock.
Additional Stock Analyses: Market Conditions and Future Outlook
Further examination of stocks like Dave & Buster’s (PLAY) revealed complexities beyond surface-level bearish indicators. Though I have written in the past about insider buying in Dave & Buster’s, it remains to be seen whether this strategy would yield similar results in the current climate. Additional stocks such as Shake Shack (SHAK), Cheesecake Factory (CAKE), and Brinker International (EAT) further corroborated the prevailing bearish sentiment in the sector.
Conclusion: The Efficacy of Swing Trade Bot in Sector-Based Analyses
The Swingtradebot platform proves to be an invaluable asset for those looking to deep-dive into specific sectors, even when starting with limited knowledge. By leveraging its functionalities, investors can efficiently discover a range of stocks within a particular sector, serving as a foundation for comprehensive analysis.
For Further Engagement
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Be careful out there!
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