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January 4, 2020
Stocks: SPLK, MCD, ROKU, SQ, MCD
Macro: SPY, VIX
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SPLK
S&P 500 (SPY)
The S&P 500 finished the week in less overbought territory with an RSI of 66. It still will need to fall further to set up the S&P 500 for higher levels. Based on the current trends in the RSI, I’m looking for it to fall to around 60, that would ensure that the longer-term direction of the RSI remains higher, while giving the index a chance to cool off. It means that any declines in the index will likely not last much longer.
VIX
Meanwhile, the trend in the VIX continues to be lower, which also suggests that the longer-term trend for the S&P 500 at this point is still higher.
We can continue to watch the headlines about the pending doom and gloom, or we can focus on what the market is telling us, and at least in my viewpoint, the trends we have been watching remain constant, suggesting higher prices for stocks still lie ahead.
Roku (ROKU)
Last week I had thought Roku would surge higher, that was the wrong call. It does seem as if the general trend in Roku is lower, and the RSI confirms that view. However, there is an interesting pattern that appears to be forming called a falling wedge, and it could suggest that long-term the stock is setting up for a push higher, just not yet.
Splunk (SPLK)
Splunk has been consolidating for some time in this $140 to $150 region. A bullish pattern known as a rising triangle has formed, and it suggests the stock works higher, with $160 next on the radar.
Square (SQ)
Earlier this week in the premium Reading The Markets room, I noted Square was likely to rise to around $70 and perhaps as high as $76 based on some very bullish options betting. You can read more here, where I also tell you the options that saw the activity. Square May Rise On Bullish Betting.
McDonald’s (MCD)
McDonald’s is starting to turn higher and could be looking to fill the gap from October 21 at $210. The RSI has also seen its momentum shift, turning more bullish.
Salesforce (CRM)
Salesforce is still very close to a significant break out if it can clear $167.
Have a good Saturday, more tomorrow.
-Mike
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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