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Swing Trade Idea (SE) – April 18, 2022

Market Outlook:

Equities continued to move lower last week with the SPY and QQQ losing 2.19% and 3.07% respectively. CPI data last week still points to very high inflation which will likely cause the Fed to shift to an even more hawkish tone – a headwind for equities. Oil prices rose last week on news that Europe may impose a ban on Russian oil. Markets continue to be driven based on the geopolitical picture, but earnings season may provide an upside catalyst. Several Dow blue chip names are set to announce earnings this week along with Netflix, Tesla and Bank of America. 

SE Bearish Idea:
Our bearish trade idea today is Sea Ltd (SE). SE is part of the internet retail industry that has severely underperformed the overall market since the reopening. SE is experiencing a strong bearish trend that started in November 2021. Price has broken below multiple support levels and has recently rallied to its 21 and 55 day EMA’s. A lack of momentum and a break back below the 21 D EMA provides a good risk/reward bearish opportunity. Both 1M and 6M trends are bearish and with a relative strength score of 1 (out of 10), SE is a very weak stock that will likely move lower.