The market has been really weak the last few days, with broad-based selling across a number of stocks. 

I was prepared for this weakness by focusing on managing risk, getting out of most of my positions, and keeping my portfolio high in cash, which you can read about here.

Despite the volatility, although few and far between, there are still some unique opportunities in this market.

Even with the market weakness, one stock is showing some relative strength, and that stock is Asana Inc (ASAN). While the SPY has sold off around 4% the last 3 days, ASAN is holding steady and appears to be under accumulation. Stocks that are green when the rest of the market is red get my attention. 

The oversold base + insider buying + sector proved to be a good trigger, and I will keep an eye out for the same setup in the future.

Asana, Inc. (ASAN), together with its subsidiaries, operates a work management platform for individuals, team leads, and executives in the United States and internationally. It provides a work management platform as software as a service that enables individuals and teams to get work done faster while enhancing employee engagement by allowing everyone to see how their work connects to the mission of an organization. 

ASAN is designed to help teams organize, track, and manage their work. The goal of the software is to simplify team-based work management. Given the Omicron variant concerns right now, I believe we could see a flight to safety in stay-at-home stocks such as ZM, TDOC, and ASAN, which are holding up nicely. I also love this chart pattern.

Technicals

On the big picture daily chart $62 was a major support level which held, for the 4th time after more than a 50% retracement from all-time highs. I was drawn to the oversold base setting up. There has also been significant Insider Buying.

We can see from the above that numerous insiders have been buying stock. The CEO for example, increased his position in the company by 1 million shares in the month of December- see below.

There are plenty of reasons for insiders and people to sell a stock. But there is only one reason to buy! And that is because insiders believe the stock is undervalued here and will likely move higher!

Short-Term Technicals

Trading Plan

Asana Inc (ASAN) is trading in a descending triangle and breaking out to the upside here. If the bulls can control the stock, there is room for a push to $80 and beyond to the 200 hourly SMA.

I’m looking for a pullback before chasing the bulls at these levels and messing up my Risk/Reward ratio on the trade. If I can get the stock lower near the moving averages, I’ll look at getting into a position at that point.

Trade Update

ASAN was my favorite trade Idea on Thurs/Fri last week and was discussed live with subscribers. Unfortunately, I didn’t get filled on my working order as there were not many pullbacks and ASAN exploded today. $62 to $80 in less than a week is pretty explosive. 

Being a disciplined trader, I will not chase the stock here. I will continue to stalk ASAN and wait for a pullback. I will stay patient and wait for a trading setup with good Risk/Reward to form before taking a trade. The point is that we can learn from this trade. The oversold base + insider buying + sector proved to be a good trigger, and I will keep an eye out for the same setup in the future.

Bottom Line

Despite the market weakness, although few and far between right now, there are still some nice trading opportunities setting up. 

One such setup was in ASAN. It formed an oversold base, had insider buying, was in a sector that could benefit from COVID scares, and showed relative strength. ASAN held steady whilst the market was selling. 

And today, on Omicron concerns, it exploded from $72 to $80 after the open. I didn’t get a fill on my buy order, but I will continue to stalk the stock for re-entry. I will also be on the lookout for similar setups in other stocks going forward.