The Week of February 25
Michael Kramer and the clients of Mott Capital own Netflix and Acadia
The calendar for the week of February 25 will be full. FOMC chairman Powell will testify before Congress on Tuesday and Wednesday. On Thursday we get the first read on fourth quarter GDP. The consensus is for 2.4% growth. On Friday we get the PMI Manufacturing Index and ISM Mfg. Index.
S&P 500 (SPY)
The S&P 500 will try to push even higher with the first level of resistance coming at 2,798 and then at 2,812.
The Russell has a big test at 1,593. If it can manage to jump above that level of resistance, it opens the door for a rise back to its August highs.
One reason for the extra optimism on top of the what I pointed out yesterday is that the technology sector broke out on Friday with the XLK rising above $70.40. It clears a path for the ETF to rise towards $72.10
The material sector is also nearing a big breakout as measure by the XLB ETF. The ETF is right at resistance at $55.90. A jump above that level sends the ETF up to around $58.
Home Depot (HD)
Home Depot reports results on Tuesday morning, and the chart looks bullish. For Home Depot a rise above $193.50 sends the stock on towards $203. We can see that the momentum according to RSI is moving into the stock, another sign that stock continues to rise.
Acadia will report results on Tuesday afternoon, and once again it is knocking on the door of a breakout. It would be nice after a horrible year for the shares to finally rise back toward’s the 30’s. The first big test comes at $24. There is a nice uptrend in the equity, and the RSI seems to be trending higher. From a volume standpoint, it looks like most of the heavy lifting was completed at lower levels. A jump above $24 final sends it to $27.
Lowes reports Wednesday morning and this stock is also nearing a break out should it rise above $106.70. If it can advance above resistance, the all-time highs are within reach. Again the RSI is trending higher, and much of the volume has traded at lower levels. It puts the stock in an excellent place to continue higher.
Square reports Wednesday afternoon, and I already gave my outlook on why the stock can rise to $83 in this free article: Square’s Stock May Jump Following Its Results
JD.com reports on Thursday, and this stock has been a monster since the end of December. The stock fell so sharply in the autumn that it created an air pocket that could allow this stock to rise back to $35. To be clear, I’m not saying it can increase to $35 this week, but over the next few weeks.
I am changing my view on Amazon after a fresh look. Looking at a new chart I found some bullish trends this morning. First is the potentially bullish flag pattern. Second, is the sharply declining volume levels which could suggest that selling pressure is decreasing. Additionally, volume by price (on the right-hand side) is implying that volume will thin out as the stock moves higher. Finally, the RSI is consolidating suggesting there may be a change in trend. If that is the case, then there is a very good chance this stock heads towards $1,780. As everyone knows I do change my views from time-to-time, and like anyone else, I am entitled to do so.
$1,780 is likely the next stop.
The chart for Netflix is implying that Roma wins the Oscar for Best Film. That is because the stock appears to be getting ready to push towards $380.
And with that, see you tomorrow.
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results. week of February 25