Weekly Pending Setups Report | New Setup ADBE

If you missed it, we provided an introductory video that summarizes the Trader Membership and its strategy. We also explain our strategy on potential stop losses here, and entry points in this report.

Keep in mind that many of our pending setups have been activated over the past few weeks, so those will all be published on in the Active Setups report posted on Thursday.

We have one new setup this week.

New Setup

• Adobe Inc. (ADBE)

Asset Classes

Equities

• Adobe Inc. (ADBE): New Setup

Equity ETFs

• Utilities Select SPDR ETF (XLU): Pending
• Health Sector Select SPDR ETF (XLV): Pending

Commodities 

• Natural Gas Future: Pending → Active (turned active August 23)

Equities

New Setup: Short: Adobe Inc (ADBE)

-Bearish divergence setup with price making higher high in late July and RSI lower high versus end of June levels.

-A break below the short term trendline and 50-DMA would provide an objective sell signal.

-All targets align with horizontal support levels, with target 3 needing price to materially reverse lower in order to be hit, including falling back slightly below the 200-DMA.

-ADBE has not corrected as meaningfully as other Tech or growth names so if broad markets continue to struggle it could see some weakness in the near term.

-A potential stop loss is placed slightly above the YTD highs.

Equity ETFs

Long Utilities Select SPDR ETF (XLU)

-Bullish divergence setup with price making lower low and RSI higher low in August compared to end of May levels. The prior divergence in March led to a 11% move for Utilities over the next month.

-Price has broke the short-term trendline, but a move above the longer-term trendline starting in December of 2022 would activate the trade.

-Target 1 aligns with the 200-DMA, while targets 2 and 3 are lower probability targets that are consistent with key horizontal levels.

-Macro Catalyst: Utilities have suffered with the sharp move higher in interest rates, but a renewed focus on defensive sectors if rates consolidate could help drive Utilities outperformance.

-A potential stop loss is placed right below the YTD lows.

Short: Health Sector Select SPDR ETF (XLV)

-Bearish divergence setup as price made higher high and RSI lower high in July compared to April levels.

-A break below the trendline extending from the end of May would provide the sell signal.

-XLV tested the upward trendline and 200-DMA, but bounced off of it so the trade stays pending for now.

-Targets align with key horizontal resistance levels, with target 3 needing price to sustain a continued reversal lower in order for it to be met.

-Macro Catalyst: XLV recently bounced off the trendline and converging MAs, but a continued rotation into cyclicals (Financials, Energy, Materials) could come at the expense of Health Care if economic data were to outperform.

-Stop loss is placed at the unfilled gap from December of 2022.