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5 Monster Stocks to Watch For The Week of
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF CELG AND AAPL
The week of September 10 will be a big one for economics, with PPI and CPI on Wednesday and Thursday. Inflation data may be critical this week, as it could seal the deal on an interest rate hike at the September Fed Meeting. But perhaps more important will be the ECB which is set to release its interest rate policy this Thursday.
When we look at the yield curve, we can see all the yields coming together, also known as flattening of the curve. So what the Fed ultimately does will have a potentially sizeable impact on the bond markets, the yield curve, and currency markets.
Pay attention to the inflation data this week, it will be telling.
Outside of that, we need to continue to watch the risk-on parts of the markets, which have performed poorly lately. Semis, as measured by the iShares PHLX Semiconductor ETF (SOXX) fell by 2.5 percent last week and nearly 3.5 percent off its highs at the start of September.
I feel like I’m on repeat mode, but Micron is a big piece of the risk-on trade, so we want to see Micron’s stock regroup this week and move higher. We have identified support around $45.25. Should the stock be able to hold support, then shares have a reasonable shot of running to$49 or $50. If not, then shares fall into the danger zone between $40 to $42.
Biotech has also been a risk-on trade that has struggled. The iShares NASDAQ Biotech ETF (IBB) has also fallen by about 3.5 percent since the start of the month. Again, the key to this group may be Celgene. The stock is more than 4 percent below its late August highs. But the stock is up more than 20 percent since the end of May, and this stock is a good barometer of the health of the group.
The stock got within spitting distance of technical resistance at $97. For the stock to continue to climb it needs to break through $97, and it has room to run to nearly $111. But should it continue to trend lower, then shares are likely going back to the mid-80’s.
Big Pharma has also been a key to the markets recent rise despite, not being a risk-on sector. But JNJ could be a leader in the group as the stock has broken out, rising above resistance at $136.75. Shares could be on their way high to back to $148.
Apple has a huge week with the new iPhone expected to be on their way, and we find out on September 12. For now, the direction of Apple looks to be lower, to around $215. If $215 doesn’t hold for support, than it goes to $209.
The banks are going to be another group to watch, especially if that yield curve keeps flattening. JPMorgan is the leader there, and for now, shares seem to be trending lower towards $112.
Good Luck this week!
Michael Kramer is the Founder of Mott Capital and the creator of Reading the Markets.
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.