Tuesday's regular session wasn't good for the bulls, but despite the red finish it wasn't a significant victory for the bears. At most, it's disappointing how poorly stocks performed after last week's losses.
My baseline expectation for the Invesco QQQ Trust (QQQ) along with the other index ETFs is for a short-term bounce. Unfortunately for the bulls, with all the indexes back under their 50-day simple moving averages (SMA), I don't expect an oversold bounce to morph into a meaningful rally. At best, I think the bulls' auction prices back toward the volume-weighted average price (VWAP) anchored to the Aug. 16 swing high. That anchored VWAP is just a bit above the declining 21-day exponential moving average (EMA), so should bounce take hold I'd be quick to take profits into or slightly above that EMA.
It's tough to want to trade a stock that you know is monitored by an outsize portion of the momentum trading community, but that's where I find myself with Enphase Energy (ENPH) . The stock broke out hugely when it reported earnings in late July, and after a month of sideways consolidation the stock has stabilized against its 21-day EMA and looks ready to break higher.
While I'm already tempted to get long ENPH, I'm being patient until the stock is above about $310. I don't make trade decisions based solely on the 14-period relative strength index, but I'd feel much better if the stock clears $310 with the RSI holding comfortably above 50.
Another solar stock I've mentioned in the past is SolarEdge Technologies (SEDG) , but unlike Enphase, SEDG has traded terribly since failing to break a double top around $371. If you're looking for alternatives to Enphase, look at Jinko Solar (JKS) and Sunrun Inc. (RUN) . Both stocks digest prior gains, but their consolidations look slightly different. On JKS, I would consider buying the stock toward $55 with a stop in the low $50s. And on RUN, I'd wait for a break to new swing highs above $38.