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Swing Trade Ideas – May 26, 2020

Market View

USA equity futures gapped up starting Sunday night and followed through Monday. World markets are up in unison.  Macro factors are aligned for strength i.e. yield curve steeper, USD down, oil up and commodity currencies higher. No particular data or news aside from NVAX starting a Phase1 trial and MRK working on a vaccine. Media is reporting optimism and not talking about USA/China trade or bankruptcies. Premarket strength is the beaten down travel and leisure, banks, insurance, small caps etc that have more to gain from a recovery and the most to lose without one. SPY levels to watch 301.79 overnight high, 300 round number and 298.36 bottom of gap-up. Keep alert for a morning pull that is likely buyable with alternate thesis of a gap fill. 

Premarket names:

MRK vaccine chatter; NVAX starting phase 1 human trials; BNS EPS; Cannabis VFF CGC CRON; China JD MOMO ; Solar ENPH ; Casinos, Airlines, Insurance, Banks, Smallcaps

Stock Idea: CREE Long

Cree is a manufacturer of LED lighting and high voltage semiconductor products. It has been displaying recent technical strength and above volume by price resistance.  CREE was upgraded today and is moving up in the premarket. There is a 9% short float which can aid it in reaching a target of 58.88 based on volume resistance and Fib extensions. CREE is not profitable hence a trade not an investment.