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Michael Kramer and the clients of Mott Capital own Netflix, Acadia, and Alphabet
The week of January 28 will definitely not be a dull one.
As I highlighted yesterday, it will be a hectic week with the China trade delegation in D.C. as the two countries continue to work towards striking a trade deal. Remember the Chinese Lunar New Year starts on February 5, which means a week for talks will likely be lost. So the stakes are rising that the two sides work out a deal and soon, as there will be less than three weeks left after the new year until the March 1 deadline. It will be in everyone’s best interest to try to get close to a deal this week.
The Shanghai market will be closed that entire week of February 4.
The FOMC Meeting
The Fed gets its time to shine too, with the FOMC meeting starting on 29th and concluding on the 30th. Remember every meeting now is a “live” meeting with a press conference to follow. Oh, the fun! Two hours of a press conference where anything can be said or entirely misunderstood by investors and the market –talk about a ticking time bomb. Yesterday we posted Jay Powell’s cheat sheet of things to say and not to say! Here it is again for your enjoyment.
What does the market expect to happen at this meeting? Nothing. The FOMC Fed Futures are pricing a 99% chance of NO Rate Hike!
The market perspective of the economy and future rate hikes seems to be turning more positive. Remember in December, the odds of a 2019 rate CUT were rising rapidly. Now the odds of a rate CUT are falling, and the odds of a rate HIKE in 2019 are Rising.
Stocks for the Week of January 28
Moving on, we already highlight the monster week for earnings. So let’s focus on some other stocks.
Netflix broke free of a descending wedge, a very bullish reversal pattern, and is now nearing resistance at $355 and the potential for a rise back to $400 is in play.
Square has a similar pattern to that of Netflix and is approaching resistance at $82 and the potential to rise back to $94.
Roku is nearing a breakout. I have looked for this one to refill the gap back at $34, but at this point, it would seem those odds are quickly diminishing. I think the chart shows rather clearly that the stock has a steady level of technical support at $38.60. It is simple for Roku: rise above $44, and it goes on to $49. Drop below $38 and it falls to $34. You can decide which direction is the more likely outcome.
JD.com is nearing a big break out should it rise above $24, with the potential to go to $26.25.
Alibaba has a solid double bottom in place and is now working its way higher towards $166.
Micron did finally break out last week and is now approaching a critical zone of technical resistance between $40 and $42, which could be paving the way for a move back to $45.50.
Alphabet (GOOGL, GOOG)
Alphabet appears to be setting itself up to rise to around $1,175.
Gilead has firmly stayed above support at $66.75 and now is likely getting ready for its next move higher towards $72.
Regeneron’s next major level of resistance comes around $440.
Nike is making its way back to $84.
Acadia has a giant gap to fill up between $28 and $30, is it ok to dream?
Blackberry was nearing a disaster at the start of 2019, and now it is breaking out left and right. $9 may be in its very near future.
Your Boldest and Craziest Call of The Week:
Yep, you heard it here first! The S&P 500 –2800 by the middle of February.
Good Luck This Week!
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.